Suitable for: Doordash Delivery Partners
Tax Difficulty: Beginner
Airtax Experience: Anyone
Time to read: 3-5 minutes
Essential tax tips for Dashers
As a Doordash delivery partner, it is important to stay on top of your tax obligations and remain compliant. To assist you with this, we have outlined a number of essential tips and tricks that all Dashers must be aware of before starting their journey.
In this article, we will be providing you with 10 essential tips to help you keep your tax affairs in order and meet your obligations as a sole trader.
- Getting started on the right foot as a Dasher?
In Australia, you will need a unique 11 digit business identification number - your ABN - when working as a sole trader with Doordash. This is used to track your business activities and details as long as it operates.
Airtax is proud to offer a free ABN application service for all sole traders, which takes no longer than 5 minutes to complete! Get started by signing up here.
- What is GST registration and do I need to apply?
GST stands for the Goods and Services Tax. It is a consumer-based 10% tax on most goods and services which businesses collect on the income you earn (such as Doordash earnings).
There are certain requirements that determine whether you need to apply for GST. This can vary depending on the level of income you earn and activity you do under your ABN.
- What car, scooter or motorcycle expenses can I claim?
If you drive your car for business purposes, you will be able to claim a car expense deduction. However, you cannot claim trips between your home and work.
If you use your car for personal use too, it is important to keep a logbook to ensure you are accurately reporting the business proportion of your activities.
Remember you can only claim a deduction for the income-earning or business portion of your expenses.
- What if I ride a bike for work instead?
You cannot claim deductions for bicycles in the same way you would for a car or motorcycle as a bike does not have the same running expenses such as fuel, oil, insurance and registration.
However, as a Dasher, you may decide to complete your work duties via a bike.
- If the cost of your bike is $300 or lower, you can likely claim an immediate deduction for the whole cost.
- If the cost of your bike is greater than $300, it is important to figure out your business use percentage by keeping a logbook as mentioned previously. Using this percentage, you will be able to depreciate the value of your bike as you would a normal asset over a number of years.
You can also claim travel expenses if you use the bike to travel from one workplace to another, or to visit clients or collect supplies to complete a job.
- How to use a logbook to claim my expenses
In order to determine the appropriate business percentage of your expenses the ATO requires that you keep a logbook of distance traveled and the purpose for your travel. This must be kept for a minimum of 12 continuous weeks during the year and can then be used to calculate a business use percentage to use to claim expenses. Each 12 week period can then be used for up to 5 years.
Learn more about how to use a logbook and download our free Airtax logbook here.
- Can I claim any clothing expenses?
It is possible for you to claim the cost of buying, mending, and cleaning work related clothing, provided that they are:
- Protective clothing
- Distinctive uniforms
- Claiming mobile phone and internet bills
As a Dasher, it is likely that you will be using your phone to complete your work obligations. This means you may have phone costs and internet bills, which generally can be claimed. You cannot claim the cost of connecting a phone, pager, or any other communications equipment, or any expenses which relate to the personal use of the item.
- Receipt and record keeping for Dashers
You should keep the receipts in relation to your business expenses for five years from when you lodge your tax return in case of an audit. This is to ensure that your claims are always substantiated.
You must have a tax invoice to claim a GST credit for purchases more than $82.50.
- Key income tax return deadlines for FY23
Read this article to understand the tax timeline to ensure that you stay tax compliant with the ATO. Remember, through Airtax, you may be able to access an extended deadline for lodging your income tax returns.
- Using Airtax to help optimise your tax position
All FY23 returns include an Accountant call to help you maximise your overall position, you can read more about these services below:
- Tax Assist: at $179, this is a 30 minute phone call where you can ask us questions regarding certain areas of your return such as the sole trader section, rental properties and more.
- Tax Professional: at $349, this is our most comprehensive call service where you have 45 minutes with one of our dedicated accountants to walk you through an entire tax return from start to finish.