DoorDash Dasher Taxes in Alabama - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for DoorDash Dashers in Alabama

Delivering for DoorDash across the Heart of Dixie offers flexibility, but it also comes with tax responsibilities. As an independent contractor, understanding these obligations is crucial for a smooth tax season.

The IRS requires DoorDash Dashers to report their earnings as self-employment income on Schedule C (Profit or Loss From Business) when filing their federal income tax return. Furthermore, because no taxes are withheld from your DoorDash payments, you’ll likely owe self-employment tax – covering both Social Security and Medicare – on any net earnings exceeding $400.

How Alabama Handles Gig Worker Taxes

As a resident of Alabama, you are required to file a state income tax return, even if your federal tax liability is zero. Alabama utilizes a graduated income tax system, meaning the tax rate increases as your income rises. This is important for DoorDash drivers as earnings can fluctuate. The primary form for self-employed individuals to report income and calculate tax liability is Form A-4, the Alabama Individual Income Tax Return. Alabama also allows for itemized deductions similar to the federal level, which can potentially reduce your state tax burden. Keep detailed records of all income and expenses. Alabama’s Department of Revenue offers resources and guidance specifically for self-employed individuals, including information on estimated tax payments. It’s important to note that Alabama does not have a separate self-employment tax like the federal government; your self-employment income is simply added to your other income and taxed at the applicable graduated rate. Estimated tax payments are generally required if you expect to owe $1,000 or more in Alabama income tax. Failing to make timely estimated payments can result in penalties. For the most up-to-date information and forms, please visit the Alabama Department of Revenue: https://revenue.alabama.gov/

Top Tax Deductions for Alabama Drivers

• Standard Mileage: The most popular and often simplest deduction. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Alabama’s relatively moderate gas prices, this rate provides a significant benefit for Dashers.
• Tolls & Parking: While Alabama doesn’t have extensive toll road systems, any tolls incurred during deliveries are deductible. Parking fees directly related to deliveries are also deductible.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan that you use for DoorDash deliveries. Keep records of your total bill and estimate the business use percentage.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, insulated food bags, and dash cams used specifically for DoorDash deliveries are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, or repairs) in the same year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment where your employer withholds these taxes, as a DoorDash Dasher, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. You’ll calculate this tax on Schedule SE (Self-Employment Tax) and include it with your Form 1040.