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. It means that you are responsible for paying your taxes. It’s always wise to set aside a portion of your earnings for taxes. The form you’ll use to file taxes will not be a W-2 (for employees) but a 1099 form. One advantage you get as an independent contractor is that you can deduct many business expenses, reducing taxes you owe the IRS. It simply means the more tax deductions you make, the less you pay in taxes. One of the most popular food delivery brands today is DoorDash. This article provides answers to some of the most frequently asked questions about DoorDash taxes. Let’s begin.
DoorDash Taxes Schedule C FAQs
What is Schedule C?
Schedule C (Form 1040) is a form that one must fill as part of their annual tax return when they are sole proprietors of a business. As a Dasher, you are considered a business owner, employer (not employee), so you must fill this form. The form accompanies the IRS form 1040 used by taxpayers who report profit or loss from their business.
This is how it looks on the IRS website: Form 1049 Schedule C
Can I file my DoorDash taxes without adding Schedule C?
It is not advisable to file your taxes as an independent contractor without adding Schedule C. It allows you to reduce the business’s income by claiming business expenses. You can skip Schedule C but bear in mind that you are going to pay higher taxes.
Should I create a different Schedule C for every delivery service I work for?
The straight answer is no. As an independent contractor, working for other delivery apps means operating the same type of business. There’s no need to create a Schedule C for every delivery service app you work for.
What’s the best business code for DoorDash contractors?
If it’s your first time filing Schedule C, you can find the different business codes starting on page C-17. The best business code to choose is the 492000 for Couriers & Messengers.
Should I write anything in the business name section (Line C)?
Because you are filing the taxes for yourself instead of DoorDash, avoid using the name “DoorDash.” Use an official business name if you have one. On the other hand, if you don’t have a registered business name, don’t enter any business name.
What should I use as my principal business or profession?
The IRS always asks you to describe your business. You can say you work in the delivery services.
What should I write as my Employer ID number?
This section is usually left blank because you probably don’t have an Employer ID Number. This ID number is generally given to employers by the IRS if applied for. You can use it if you have employees or you want to identify your business.
Where to put my DoorDash 1099 information?
There is no need to put any of your DoorDash 1099 on the Schedule C form. Also, there’s no need to attach your 1099 to the form.
What should I put as returns and allowances?
It’s rare when you are a delivery contractor. You file this section when you get a return or refund after offering a service or selling a product. It doesn’t usually happen in the delivery service industry.
Maximizing Deductions
Keep in mind. One of the goals of tax season with food delivery gigs is to pay as little taxes as possible by maximizing deductions.
Related Topics:
- 8 Biggest Tax Deductions For Food Delivery & Rideshare Drivers
- Tax Deductions in the Gig Economy: What You Need to Know
- 7 Tax Deductions Gig Economy Drivers Might Forget About
- 7 Tax Deductions To Write Off If You Use Car To Earn An Income
- 10 Changes To Taxes Filing 1099-Form Independent Contractors Should Know About
Additional Tax Resources
I wrote up a pretty comprehensive guide back in 2016 when I first filed my food delivery and rideshare taxes. It might be of help to you:
If you still have some questions, check out the DoorDash support page on this topic of taxes: Common-Dasher-Tax-Questions
Conclusion
Tax filing can be complicated and specific to each individual, depending on where they live and other factors. The resource provided here aims to make it easier, but you should not take them as absolute rules. Seek advice from a tax professional. Or use a tax filing product like TurboTax or H&R Block, especially if you’re filing for the first time as a gig worker.
