Returns and allowances are rare for delivery contractors. This is used if you received money, such as for selling an item or getting paid for work, and then had to return or refund money. The IRS instructions say, “If you started or acquired this business in 2024, check the box on line H. The interview process in these programs is incredibly important. The less you know about the tax process, the more you need a program that will walk you through things with the right questions, asked in the right way, to ensure you don’t miss anything.
Whether you’re driving for Uber, delivering for DoorDash, or offering freelance services, selecting the proper code can help you simplify tax season and potentially increase your tax savings. Incorrectly categorizing your business could raise red flags with the IRS, especially if your reported expenses deviate significantly from what’s typical for your industry. By choosing the correct NAICS code, you help minimize audit risks. The purpose of this article is to provide education on how the Schedule C form works for independent contractor taxes.
Many of the sections will have their own set of questions and answers. At the end of the article, we’ll have a complete list of all questions. Security Certification of the TurboTax Online application has been performed by C-Level Security. Some of the details can get more involved which is why we have so many questions and answers on this page.
The Short Answer: DoorDash’s Business Code
The vast majority of independent contractors for gigs like Doordash, Uber Eats, Grubhub, etc. use cash accounting. It simply means you pay as you go and get paid as you go. Accrual accounting is a more advanced form of accounting used by larger businesses. Seriously consider finding a tax professional who understands independent contractor (especially gig economy) taxes. The savings they can find may often save you far more than you pay in, and they are far more likely to keep you out of trouble.
Potential Tax Deductions
For instance, mileage and vehicle expenses are typical for drivers (Uber, Lyft), while office supplies and software expenses are common for freelance writers or designers. An accurate code helps you maximize allowable deductions by providing clarity on which expenses are typical for your industry. Also known as NAICS (North American Industry Classification System) codes, business activity codes play a vital role in your tax filing process. These codes allow the IRS to classify your work, making it easier to ensure that your reported income and expenses align with industry standards.
This does not get into state or local taxes or taxes in other countries. Check with your tax professional for details related to your location. That net profit is the part that gets moved over to your 1040 form as income.
Maximizing Deductions
- Having organized records is essential for supporting your NAICS code selection, as it ensures you can demonstrate that your expenses align with industry norms.
- This classification reflects DoorDash’s primary business activity of delivering food and other goods directly to consumers through its digital platform.
- It’s added to the income part of Schedule C to help determine your personal income.
- Suppose you make an income with food delivery apps like DoorDash, UberEats, etc., that makes you an independent contractor.
This is part of a series of articles on Doordash taxes. There’s a lot more to it than you can cover in just one extensive article, and that’s why Capital markets definition we wanted to give you some more in-depth information. You’ll find links to other articles, and you can find a list of other articles in the series. Understanding these codes is crucial for DoorDash to maintain compliance and optimize operational strategies in a complex regulatory environment. This section is usually left blank because you probably don’t have an Employer ID Number.
What’s the best business code for DoorDash contractors?
Exploring DoorDash’s business code not only reveals its place within the broader economic landscape but also highlights the evolving nature of delivery services in the digital age. As you delve deeper, you’ll gain a better understanding of how this code reflects DoorDash’s multifaceted role in connecting consumers, merchants, and drivers through innovative technology. This code applies to companies providing local delivery services, such as DoorDash’s courier and logistics operations.
Which industry classification does DoorDash fall under? DoorDash operates within the courier and delivery services industry, focusing on food delivery and last-mile logistics. Specifically, the principal business code for DoorDash would fall under the category that encompasses delivery services.
Second, be careful about the free programs that support Schedule C. I’ve walked through the process on some of the free programs. I found that it’s really easy to miss important things if you don’t know what you’re doing. However, if you choose to do your own taxes with a tax software program, be careful about what program you choose. Because this form has several entries, I thought it would be helpful to do a lot of this in a question-and-answer format.
Frequently asked questions about Schedule C
Do not put Doordash (or any other platform) as your business name. You are filing as a business that has contracted with the food delivery service. However, you are not a part of Doordash.If you have not registered a business name, such as by creating an LLC or some type of corporation, do not enter a business name here.
- Returns and allowances are rare for delivery contractors.
- It’s always wise to set aside a portion of your earnings for taxes.
- Check with your tax professional for details related to your location.
- We go into more detail about questions like what can I write off as a Doodash driver.
- At the end of the article, we’ll have a complete list of all questions.
Your net profit (not your 1099 income) is added to other income on your Doordash tax return to determine the income tax portion of your tax bill. Since DoorDash operates a technology platform that processes orders and coordinates deliveries, this code is relevant to its IT infrastructure. Brad Thibeau is the Head of Growth & Partnerships at Everlance. Brad has worked at Everlance since 2021 with a focus on helping self employed people save time and money on their taxes. Remember to double-check your code each year as your business activities evolve, and take advantage of tools like Everlance to keep your records in order. A well-organized tax strategy starts with a single code, but it can lead to significant savings and peace of mind.
This hybrid approach is a key factor in DoorDash’s rapid growth and market presence. Suppose you make an income with food delivery apps like DoorDash, UberEats, etc., that makes you an independent contractor. Because of this, the platforms will not deduct taxes from your pay.
An EIN is assigned to your business by the IRS if you apply for one. Generally, it’s used if you have employees or want a tax number that identifies your business instead of yourself. It’s a good way to avoid putting your social security number out there more than necessary. Each of these codes provides a standardized way to understand and categorize DoorDash’s multifaceted business operations, ensuring clarity across legal, financial, and commercial contexts.
Neither one lets you create different “other” expense categories for tracking. First, you must make sure that the software supports Schedule C filing. If you use the lower-priced or free programs, you may get something that doesn’t let you write off your expenses. However, most of these principles apply to gig economy contractors with companies like Grubhub, Uber Eats, Instacart, Uber, Lyft, and many others. You can look for more information in our article in this series about how Doordash 1099’s work, where we answer questions like do I have to file taxes for Doordash if I made less than $600.
Realizing his experience could help other drivers, he founded EntreCourier.com to encourage delivery drivers to be the boss of their own gig economy business. Several expenses don’t fit well into the expense categories in lines 8 through 26. Part V is where you write a description of the items and the total paid for those items.
However, 1099 income is your business’s income, not your personal income. It’s added to the income part of Schedule C to help determine your personal income. We’ll get more into that when we get into the expense section. You only put an Employer ID Number (EIN) if you actually HAVE an EIN. If you’re not sure if you have an EIN, you probably don’t.


