If so, you need to know that you’re operating as an independent contractor.
Therefore, your taxes work differently than when you’re working for a company as a W2 employee.
As a self-employed Grubhub delivery app driver, you likely need to pay quarterly estimated taxes on your earnings.
In this article, you’ll get the guidance you need to navigate the process of filing taxes as a Grubhub 1099 contract driver, including what forms to file, when to file, and any deductions that may apply.
Table Of Contents
Grubhub Tax Basics (Overview)
As a Grubhub driver, you’re considered self-employed and typically must file quarterly estimated taxes on your earnings.
You can take deductions on items like mileage, phone, insurance, and parking expenses.
It’s essential to keep track of all your income and expenses throughout the year to accurately file your taxes.
Keep in mind that the deadline to file your tax return as a Grubhub driver is April 15th.
Ways to File Your Taxes
You have three ways to choose from when it comes time to file your tax return as a Grubhub driver.
If you’re comfortable doing your taxes, you can file them manually.
It’s the most time-consuming option and can become arduous if you’re unfamiliar with tax laws.
You’ll need to gather all of your income and expense information throughout the year and fill out a Form Schedule C (Profit or Loss from Business).
You can find this form on the IRS website.
Once you’ve filled out the form, you’ll need to submit it with your other tax forms when you file your return.
2. Yourself/Tax Software
If you’d rather use tax software to file your taxes, a few options are available.
TurboTax and H&R Block both offer software specifically for independent contractors.
The process is relatively simple, and the software will walk you through everything.
However, it’s important to note that these programs are not free.
3. CPA (Our Suggestion)
If you’re feeling overwhelmed by the thought of filing your taxes yourself, we suggest working with a CPA.
A certified public accountant will have expertise in tax laws specific to independent contractors and can help ensure that you’re taking all of the correct deductions.
CPAs typically charge an hourly rate for their services.
Make sure to discuss all fees beforehand.
You can find a list of CPAs in your area on the American Institute of Certified Public Accountants website.
Grubhub Tax Forms
You’ll need to familiarize yourself with a few tax forms and terms that you probably haven’t dealt with in the past.
It’s going to seem especially foreign to you if you’ve worked your entire life as a regular W2 employee.
The most common tax form you’ll receive as a Grubhub driver is Form 1099-NEC.
It stands for Nonemployee Compensation.
The IRS uses this form to report payments made to independent contractors for services rendered.
You’ll receive this form if you’ve received more than $600 from Grubhub in a year.
Form-NEC will list the total amount of money you’ve received from the company.
You’ll need to report this form on your tax return.
You may also need to make quarterly estimated payments.
For more information, consult the IRS website.
Another critical item to be aware of is Grubhub’s Employer Identification Number (EIN).
Businesses use an EIN to identify themselves on tax forms and other official documents.
You’ll notice the Grubhub EIN on the 1099-NEC the company sends you.
Grubhub reports to the IRS all the income is paid out to you throughout the year.
If you’re tempted to under-report your Grubhub income, you need to be aware that the IRS knows the income amount that appears on Form 1099-NEC.
Any Other Tax Forms You Might Receive From the Company
The only other type of tax form you may receive from Grubhub is the 1099-K.
It’s a form for anyone earning more than $20,000 throughout the year.
Grubhub will send you Form 1099-K if your total taxable earnings reached more than $20,000 and included over 200 transactions.
Why Is Grubhub Changing to 1099-NEC Instead of 1099-MISC?
Grubhub is changing its tax form from the traditional Form-MISC to the more recent Form 1099-NEC.
The change is likely due to the new IRS guidelines for independent contractors, which went into effect for the 2020 tax year.
The main difference between the two forms is that Form-MISC reports payments made to independent contractors for services rendered, while Form-NEC reports Nonemployee Compensation.
If you’re a Grubhub driver and receive more than $600 in payments from the company throughout the year, you’ll receive a Form-NEC instead of the traditional Form-MISC.
You’ll still need to report this income on your tax return.
If you didn’t receive a Form-NEC from Grubhub, it doesn’t mean that you don’t have to report any income from the company.
The most likely scenario is that your total taxable earnings were below $600.
Again, you should report all of your Grubhub income on your tax return if you don’t want to get surprise notices from the IRS that you owe various penalties and charges.
As an independent contractor, you’re allowed to take deductions on certain expenses related to your work.
The most common deduction is mileage.
You can deduct mileage expenses incurred while traveling for business and performing work duties.
You can use either the standard mileage deduction or the actual expense method.
The IRS uses a fixed rate per mile to base the standard mileage deduction on, while the actual expense method considers your actual costs for fuel, repairs, and maintenance.
Use a mileage tracker app to track your mileage while driving.
This makes writing off mileage during tax time much easier than manually keeping track.
Gear and Equipment
Another standard deduction is for gear and equipment.
You can deduct the cost of any tools or supplies deemed necessary for your work as a Grubhub driver.
These items include things like GPS units and delivery bags.
You can also deduct the cost of gas, oil, repairs, and depreciation on your car when you use it for business purposes.
The deduction amount depends on how much you spent on these items throughout the year.
Phone and Service
You can also deduct business-related expenses like phone, Internet, and other services related to your work as a Grubhub driver.
You need to track all of these costs throughout the year, so you’re able to provide documentation with your tax return.
Examples of deductible expenses related to your phone and its services include the following items.
- Cellular Phone Line
- Installation Fees
- Cell Phone Taxes (Federal & State)
- Business Internet Services
- GPS Tracking Device
- Equipment Rental Fees
- Long Distance Charges
Parking, Tolls, Other Fees
If you incur any parking fees while working as an independent contractor driver, you can count them as a deductible expense.
You can deduct the costs associated with parking your vehicle at the customer’s location when delivering food.
Insurance premiums for your vehicle are also deductible.
Your insurance deductions include liability, collision, and comprehensive insurance premiums.
Other: Inspections, Roadside Assistance, etc.
If you’re required to pay any other type of fees related to your work as a Grubhub driver, these are also deductible expenses.
These items might include things like inspection fees, roadside assistance, or membership dues for a professional organization related to your work.
You should keep track of all of the deductions you’re taking throughout the year so you can provide documentation with your tax return.
It’s important to note that not every deduction is available to everyone.
You need to meet specific qualifications to take a particular deduction.
For more information on what deductions are available to you, always consult with a tax professional or visit the IRS website.
Importance of Mileage Tracking
It’s vital to track your mileage throughout the year, especially if you’re planning on taking the standard mileage deduction.
The IRS requires that you keep records of all miles driven for business purposes.
The deduction includes travel to and from work and any other trips related to your work as a Grubhub driver.
If you don’t have a good way to record the exact mileage on paper, you can use a GPS tracking device or app to estimate the number of miles driven for work-related purposes.
You should also keep track of each trip’s date, destination, and purpose.
You can find more information about how to document your mileage in Publication 529: Miscellaneous Deductions.
Frequently Asked Questions
While the above information should get you started on your journey toward filing your Grubhub 1099 taxes, you may still have additional questions.
What if I didn’t receive a 1099 from Grubhub?
The first thing you should do if you didn’t receive your Grubhub 1099 by January 31st is contact the company and ask for it.
You won’t get Form 1099 from Grubhub if you earned less than $600.
You still need to report that income on your tax return and pay taxes on it.
Can you write off gas for Grubhub?
If you drove your own vehicle for work-related purposes, you can write off the cost of gas and oil.
You need to keep track of all of your receipts so you can provide documentation of your return.
Do I need to tell my insurance if I drive for Grubhub?
Yes, you should let your insurance company know that you are driving for Grubhub.
If they aren’t aware, it could lead to a cancellation of your policy or the denial of coverage if an accident occurs while driving as a Grubhub independent contractor.
Can I report income without a 1099?
As we mentioned above, you still need to report your income even if Grubhub doesn’t provide a Form 1099.
You’ll just have to estimate the amount of income earned and fill out an additional form called Schedule C (Profit or Loss from Business).
Does Grubhub report to the IRS?
The IRS requires Grubhub to report your income earned as an independent contractor driver.
Some people try to get away with under-reporting their 1099 income to the IRS.
Don’t make this mistake.
The IRS will gladly penalize you for it.
Tax season is here, meaning it’s time to file your Grubhub 1099.
Decide whether you’ll file manually, with tax software, or through a CPA.
Then, make sure you get your tax return delivered to the IRS by April 15th.