- Keep track of your income and expenses throughout the year.
- Be aware of all the deductions you can take as a delivery driver.
- File your taxes on time to avoid penalties and interest charges.
The last-mile deliveries in the urban sector can increase by 78%, and the global market is expected to be $91.5 billion by 2030.
With the increase in business demand, the work of delivery drivers will increase, which may result in increased earnings and extra cash in hand.
But earning more means that the delivery drivers must manage their taxes wisely. The tax filing process is not a simple task. We have filtered a few tax filing tips for delivery drivers.
We’ve covered the nitty-gritty elements around tax filing, and it can enable you to manage the taxes well.
Table of Content
When are Tax Filings Due?
Compiling the tax forms and ensuring that the financial books are maintained properly is difficult. The paperwork must be finished within the deadline, and the fillings must be done on time.
But when are the taxes due?
Well, it depends on the location of the delivery operations.
Tax Filings Due in the United States
The tax filing in the United States has a deadline of April 15 every year. If you have a tax due in 2022, you must fill it out by April 15, 2023.
You can also request extending the deadline beyond April 15 if you need more time to compile the paperwork. But chances are you might have to pay a late fee for filing the tax after the due date.
Tax Filings Due in the United Kingdom
You need to file your income tax return before October 31 in the United Kingdom if you are using the traditional method. But the tax returns can be filed before January 31 if you want to do it digitally.
You’ll be charged late fees up to 5% of your total tax if you don’t complete the tax filing before January 31.
Tax Filings Due in Australia
The last date for tax filing in Australia is October 31, and you can apply for an extension if you can’t complete the tax filing before the deadline. You need a tax agent to complete the late filing process.
Anyone earning more than AUD 18,200 must file the tax, and you’ll get an I.T assessment of what you owe to the government from the Australian Taxation Office (ATO).
Tax Filings Due in Canada
The last date for filing tax in Canada is April 30, and if it falls on a holiday, Saturday, or Sunday, then the Canada Revenue Agency (CRA) will postpone the filing date to the first business day after April 30.
Tax Filings Due in France
The tax filing day in France is divided into multiple départements. For offline postal returns, the deadline is 19 May, and for départements 1 to 19, the deadline is 25th May.
If you fall under départements 20-54 and 50-101, you must file the tax before 31st May and 7th June, respectively.
You need to connect with a tax professional who can manage the complexities of the tax filing process and help with the tax preparation to pay taxes.
You need to pay tax on the total revenue or income for the year. You can provide different documents or follow different legal formalities to benefit from the tax reduction.
What Can You Claim On Your Taxes As A Delivery Driver?
Being a delivery driver or an independent contractor, you can cover work-related expenses like actual car expenses, including maintenance and gas. You might need to claim these expenses before paying taxes as tax deductions differ in these cases.
You can subtract the expenses from your delivery driver’s income, reducing estimated tax payments and increasing profits.
Being a delivery business, you should focus on calculating the business mileage of your vehicles, which can be a primary metric while managing your expenses.
The tax authorities have a standard mileage rate that can help you reduce the tax rate. But you need to understand that you can’t deduct gas and mileage.
For example, for food delivery drivers, you can include actual vehicle expenses, including delivery job maintenance, payments, gas, depreciation, registration, and other food delivery driver tax-deductible sources.
Include on-road expenses
You can also include road tolls and parking expenses apart from the mileage deduction to your delivery business. During the tax filing, you can claim roadside assistance or a vehicle inspection included in the business expense.
Include additional expenses
Other expenses like cellphones, phone bills, mobile accessories, backpacks, and multiple tools directly connected with the delivery operations and drivers can be included in business expenses.
These expenses need to be included with the revenue generated by the delivery business and should be stored safely to generate well-vetted business performance reports for optimizations later. You must provide detailed reports and proof when the authorities conduct a background check.
The expense data needs to be calculated using professional software integrated into your business ecosystem to help you improve your business operations and keep an eye on your expenses.
We’ll talk about tools and technologies you can use for your delivery business in the latter half of the article.
Apart from adding these expenses to your tax filing, different tax filing tips can help you with your tax bill reduction approach and ensure you don’t drain your profits.
3 Tax Filing Tips For Delivery Drivers
Multiple tactics and strategies are used by different financial experts to ensure that a business can utilize most of the rules and benefits provided by the governing authority.
But we have filtered the important and result-oriented tips for your tax filing.
1. Operating expense deduction
The first tip is to ensure that you include the operating expense claims that can reduce the overall taxable income.
For 2021, the standard mileage rate is 56 cents/mile. Once you calculate the business mileage driven by your vehicles using robust GPS-based tracking software, you can multiply it by $.56 to get your mileage deduction.
Many businesses miss out on these deductions by not calculating the mileage accurately. But you need to ensure that you don’t make the same mistake. Integrate software to ensure you have the required data for your efficient tax filing.
The tax filing can include different operational expenses like mileage, maintenance, car washes, meals, insurance, phones, health insurance, toll fees, parking fees, vehicle tools, lease payments, and depreciation can be included in the tax filing.
You must ensure you don’t miss the expense listing to get tax filing benefits.
2. Paying monthly or quarterly estimated taxes
If you fail to pay the taxable income every month or quarter, you will incur a bigger tax bill at the year-end. The bigger bill will wash out your profits, which can be troublesome for smooth delivery operations in the future.
For example, if your earnings from the delivery segment are $5,000, the approximation of the estimated taxes is over $1,000.
You must ensure that you add the expense to your tax filing, hire a professional accountant, and minimize the taxable income by regularly paying taxes using legal or tax advice.
If you don’t skip the monthly or quarterly tax bills, you can manage the tax filing effectively and avoid the piled-up tax dues at the end of the year.
It can help you streamline the filing process and avoid miscalculations at the end of the year when approaching the tax filing deadline. Regular tax-paying will reduce stress and enable you to focus on your core business operations.
3. Form 1040 to file
Asa delivery driver business; you must fill in tax Form 1040 to complete your tax filing. As an employee, the delivery driver needs to enter wages from your W-2 form and go on line 2 of Form 1040.
The federal income taxes withheld by the employer go on line 17 for effective tax filing. You must attach additional schedules to the 1040 form as an independent contractor.
You need to use Schedule C to report the revenue earned as a delivery driver and don’t forget to use Schedule SE to calculate the self-employment tax.
These form filling are important and can help you avail of the tax reductions for your delivery business. You can get tax advice from professionals who can help you prepare to minimize your income tax.
But you need quality software that can help you examine your business operations, minimize operational costs, enhance overall productivity, and help you with tax reductions.
How Can A Route Planning and Optimization Software Help In Your Delivery Operations?
A route planning and optimization software stores vital information about your business and employee performance that can help you optimize the workflow and use the data in your tax filing.
Here are the benefits it offers:
1. Centralized control
The route planning and optimization software gives the delivery business a centralized control over monitoring the business performance and tracking the business numbers effectively. It enables you to create a smooth communication link between the management and the on-ground workforce.
You can increase business efficiency by removing the dynamic hurdles that may arise between the working hours. You can communicate with the customers efficiently to increase the quality of the customer experience.
2. Real-time update
You can get real-time updates about the location of the delivery drivers that can help you make better-informed decisions. You can share the tracking link with the customers to keep them updated about their order’s delivery.
You can get detailed performance reports of the vehicles to help you in the tax filing process. The real-time updates remove the miscommunication and information lags in your delivery business.
3. 24*7 access
The 24*7 access can help you handle the operations from anywhere and anytime. You can enable your customers to get access to the required information 24*7.
A route planning software can help you access the data to ensure that the business operations remain streamlined.
These benefits can help you handle multiple delivery orders and extract optimized routes for multiple delivery locations.
But you need to choose one of the professional route planning and optimization software to avail of these benefits.
We have filtered one of the best software to help you transform your delivery business.
Easy to Use Multi-stop Route Planner
Upper Route Planner is an advanced route planning tool to create multi-stop route in minutes. Simply optimize route with one click and dispatch routes to drivers in seconds.Get Upper Now!
No, the delivery tips are not taxable as you can get a tax deduction of the amount. If you are into food delivery or other fast lane delivery service, you can get instant tips from the customers without including the amount in the delivery driver’s income.
Yes, the taxable amount can be minimized if you follow a few basic tips and include your business expenses in your tax filing. You can hire a financial expert to help you sort your tax filing and avail of the tax benefits for your delivery business.
The best tip for tax filing includes all the delivery business expenses, like vehicle mileage, fuel cost, equipment cost, salaries, and other important elements to minimize your taxable amount. You can also pay your own taxes and ensure that the payments are made within the current tax year. Independent contractors can pay self-employment taxes or regular income taxes while filing tax returns. Business owners can use tax filing software or take expert financial assistance for their income tax returns. You can get a tax refund on your business income by using the actual expenses method to file taxes.
A route planner tracks the information of the vehicles, delivery operations, operational costs, and other factors that can help you in the tax filing. You can create well-vetted reports as proof that can help a delivery business avail of the tax reduction benefits and streamline the filing process.
Upper Route Planner is the top route planner available in the industry because it combines premium features and cost-effective pricing. It can help the delivery business scale operations with finesse and ensure a quality customer delivery experience.
Upper Route Planner Resolves Delivery Troubles
Upper Route Planner is the leading route planning and optimization software to help you increase your business efficiency and manage your operations with finesse.
The intuitive and smooth UI/UX makes it easier for the employees to adapt to the new integration and extract the desired results from the software.
It can deliver highly optimized route planning results by analyzing the traffic and weather conditions in real-time to deliver the shortest and optimized delivery routes.
You can create routes for over 500 delivery addresses within a few clicks and can dispatch your delivery fleet.
It can help you minimize the route planning time by 95% and increase your business productivity by 40%. You can communicate with the customer and employees effectively to increase business efficiency.
You can access the free version of the software to get a hands-on experience before you make the final buying decision.
So, what’s making you wait?
Access the free 7-day trial period and transform your delivery operations.