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.
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.
Food Delivery Services (DoorDash, UberEats, Postmates, GrubHub, etc.)
NAICS codes are six-digit identifiers assigned to various industries, allowing governmental agencies like the IRS to track and analyze economic activity. These codes provide insights into different sectors of the economy and are especially helpful for tax administration. When you file your taxes using a Schedule C, you’re required to list a business activity code that reflects your primary source of income. While DoorDash primarily uses codes related to delivery services, additional codes may apply if the company expands into other business areas. Well, if you’re filing taxes, writing a report, or just plain curious, knowing DoorDash’s exact business code can clarify how they fit into the broader industry framework.
The main thing they’re looking for is if you have a record of your miles. The IRS requires a How to hedge stocks log that has a daily record of your business miles, showing date, miles driven, where you went and the business purpose. You can read more about the mileage log requirements for Dashers here.
Using Schedule C to find the right tax software for Dashers
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 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.
Practical Implications of Business Codes for DoorDash
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.
The Self-Employed Tax Revolution: File Your 1099 Forms Electronically
- 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.
- This question pops up quite often, especially for folks dealing with taxes or curious about the intricacies of how big companies like DoorDash classify themselves in the business world.
- This code applies to companies providing local delivery services, such as DoorDash’s courier and logistics operations.
- The vast majority of independent contractors for gigs like Doordash, Uber Eats, Grubhub, etc. use cash accounting.
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.
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.
- You are filing as a business that has contracted with the food delivery service.
- Additionally, DoorDash’s business model integrates technology with traditional courier services, positioning it uniquely within the broader transportation and warehousing industry.
- However, 1099 income is your business’s income, not your personal income.
- Certain deductions are common within specific industries, and the IRS may view your expenses in the context of your NAICS code.
- Schedule C is called “Profit and Loss From Business.” You list your income and expenses as an independent contractor for Doordash, Uber Eats, Grubhub, Postmates, and other gig platforms.
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.
There’s no need to create a Schedule C for every delivery service app you work for. This guide explains everything you need to know about choosing the right business activity code and provides specific NAICS codes for popular gig economy jobs. Schedule C is called “Profit and Loss From Business.” You list your income and expenses as an independent contractor for Doordash, Uber Eats, Grubhub, Postmates, and other gig platforms. Completing a Schedule C essentially creates the self-employed person’s version of a W-2. That’s because your profit from line 31 is what gets moved over as income to your 1040 form. The first part of form Schedule C is where you identify yourself and your business.You’re most likely to fill out Schedule C if you are a sole proprietor or if you’re operating a single-member LLC.
There might be a place where it’s used with some gig platforms. For example, Uber Eats will report they paid $13, but you only received $10 (hypothetical numbers). Some accountants say to use Cost of Goods Sold for that service fee since it’s a cost related directly to the service you are providing. Others will tell you to put it down as an “Other Expense” in line 27. 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.
Standard Industrial Classification (SIC) Codes
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.
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.
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.