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How to Fill Out Schedule C for Doordash Independent Contractors

Filling out Schedule C is possibly most important part of figuring out your Doordash taxes.

It's even more important than the Doordash 1099 you get early each year (or any other 1099's from any other gig economy companies). That's because your Schedule C, and not your form 1099-NEC, is the form that determines your taxable income.

Even more important: Schedule C is the form that lets you write off your business expenses and the mileage from your car even if you take the $12,950 standard tax deduction (2022 tax year, $25,900 for joint filers).

King Kong wearing a Doordash shirt swatting at airplanes labeled Taxes and Schedule C.

And the thing is, it's a bit simpler than you might think. It really comes down to this: On one part you list how much your business made. The next part you list your expenses. You subtract expenses from income, and that's your net profit.

That net profit is the part that gets moved over to your 1040 form as income. It's your net profit (not your 1099 income) that is added to other income to determine your income tax. It's that total that's left after expenses that your self-employment taxes (our version of FICA taxes) are based on.

We'll look a bit deeper at Schedule C for Dashers. In this article we'll look at:

Some important information about this article

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 big 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 at the end.

Because this is a form with a lot of entries, I thought that it would be helpful to do a lot of this in a question and answer format. 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.

DO NOT take any of this as tax advice. The purpose of this article is to provide education on how the Schedule C form works for independent contractor taxes. For particular information about your individual situation, you should seek out a tax professional who can provide specific answers for you.

We do focus on Doordash with this article, however most of these principles will also apply for gig economy contractors with companies like Grubhub, Uber Eats, Instacart, Uber, Lyft and many others.

Finally, this is about federal return in the United States. This does not get into state or local taxes or for taxes in other countries. Check with your tax professional for details related to your location.

Using Schedule C to find the right tax software for Dashers

I said this already, but I'll say it again. Seriously think about finding a tax professional who understands independent contractor (and 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, if you choose to do your own taxes with a tax software program, be careful about what program you choose.

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. Trying to save money can often cost you a LOT more.

Second, be careful about the free programs that do support Schedule C. I've walked through the process on some of the free programs and if you don't know what you're doing, it's really easy to miss important things.

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 that it makes sure you don't miss anything.

Look for the Self-Employed version of a software program. In my experience, the more established programs with self-employed versions (H&R Block, Tax Slayer and Turbo Tax are better at one, leading you to the right forms like Schedule C, and two, making sure you get it right.

Filling out the business and personal information part of Schedule C

Business Information Section of IRS Schedule C


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. If you're not sure which one you are, it's a pretty good guess you're a sole proprietor. That's the official term for someone simply doing business as themself without any other formal business identity.

Your business is what the IRS considers a “pass through” business. What that means is that the self-employment income from your business is taxed as part of your personal income taxes. It's just another form of income that gets added to your total income on your Federal tax return, just like W2 wages.

For that reason, the IRS needs to know both who you are as an individual and how your business is made up. They'll want your social security number. They want to know what your business is. That's what this part of Schedule C is about.

We'll walk through this part with a question and answer format.

What is my principal business or profession (line A)?

The IRS instructions say to describe your business here. A short simple phrase works nicely. I have always used “on demand delivery services.”

What is the best business code for Doordash contractors (Box B)?

In the back of the Schedule C Instructions starting on page C-17 there is a list of different business codes. The best Doordash business code I could find (and other delivery platforms) is 492000 for Couriers & Messengers.

Should I put anything down for a business name (Line C)?

Do not put Doordash (or any other platform) as your business name. You are not filing taxes on behalf of Doordash. You are filing as a business that has contracted with the food delivery service but you are not a part that company.

If you have not registered a business name, such as by creating an LLC or a corporation of some type, do not enter a business name here. If you do have an official business name, use that name.

What should I put for my Employer ID Number (Box D)?

Most of us will leave this blank. 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. An EIN is assigned to your business by the IRS if you apply for one. Generally it's used if you have employees, or if you want a tax number that identifies your business instead of yourself.

What accounting method should I mark on Line F?

If you're asking the question, you're probably using 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.
If you're using accrual accounting it's more likely either you already know what to put here or you have an accountant who knows what to put here.

Did I materially participate in my business as a Doordash independent contractor?

Almost certainly yes. I have yet to meet someone in the delivery gig economy world who did not materially participate. If you were involved in the actual deliveries or managed the deliveries in any way, you materially participated.

Should I check box H that I started my business in 2020?

The IRS instructions say “If you started or acquired this business in 2020, check the box on line H. Also, check the box if you are reopening or restarting this business after temporarily closing it, and you did not file a 2019 Schedule C for this business.” If you filed a Schedule C in 2019, you would not check this box.

Should I check “yes” on Line I (required to file form 1099) if I received a 1099?

The wording of Line I is a little confusing. This is not about if you received a 1099 form, it's about if you had to send a 1099 form to someone else. If you used a subcontractor and paid them more than $600, you are required to send a 1099 form to them and the IRS. That is when you would check yes.

The first section of Schedule C is the personal information part of the form. This is where the IRS needs to know who you are and who your business is.

How the income part of Schedule C works

The Business Income Section of IRS Schedule C

This is where the IRS asks: How much did your business make?

A lot of contractors confuse their 1099's with W2 reports from an employee. There are some major differences between the two.

A W-2 will report your taxable income. It just gets added to other income on your tax form. 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.

Infographic comparing Doordash 1099 to a W2 showing that W2 is from employer, 1099 from customer, W2 is taxable personal income, 1099 is business gross income, W2 added to 1040 income, 1099 added to Schedule C income, All of W2 added to 1040 income, only profit from 1099 income added to 1040 income, W2 has withholding, Doordash doesn't.

Most Dashers are going to fill out just one line: Gross receipts. Because we're not selling items, we don't have returns and allowances nor do we have cost of goods sold.

On line one, you enter the total earnings (sales and income) for your business. If all you did was deliver for Doordash, that would be the information from your 1099-NEC form that you received from them. If you didn't make enough to get a 1099, you add up what you did receive and enter that information.

Independent contractors who worked for several companies will add up their gross earnings, received from all those companies and from customer tips, and enter that total on line 1 of Part 1:Income on Schedule C.

What would I put for returns and allowances?

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.

What is Cost of Goods Sold?

Cost of Goods Sold is usually related to if you're selling products. When you buy and resell items, the cost of the purchase is a Cost of Goods Sold.

If I have to drive to provide my service, isn't that a Cost of Goods Sold?

No. Cost of Goods sold and Business expenses are different. Equipment and transportation costs are an expense, a cost of doing business. Driving is an indirect cost and thus vehicle costs are recorded as expenses. That's different than the direct cost of purchasing or producing items that you sell.

Is there a time when I would have a Cost of Goods Sold as a Doordash contractor?

I can't think of any. 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). They then say they charged you a $3 service fee. 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.

I have more questions about what income and 1099s on my Doordash taxes

You can look for more information in our FAQ about income and 1099's on your Doordash taxes. You can also read up in our tax guide about how gig worker income works.

How the expense part of Schedule C works

Business Expense Section of IRS Schedule C

Once you've entered your income, now it's time to add up the expenses.

Part II of form Schedule C has a list of expense categories. The way this works is that you add up all the money you spent on each expense category and enter the total next to each section. Most of these are going to be blank for independent contractors.

The big one for Doordash drivers is line 9: Car and truck expenses. It's on line 9 that you will add in either your standard mileage rate (business miles times $0.585 for 2022) or the business use percent of actual expenses related to your car if you choose to use the actual expense method.

For more information on how the vehicle expenses work, we go into more detail about car expenses for Doordash in this part of our Doordash tax series.

After filling out the expense categories, there are a number of other questions related to expenses. We'll talk about what qualifies as an expense, and look at each of those questions coming up.

When it's all said and done, you'll add up your total business expenses, subtract those from income, coming up with net profit (or loss).

What expenses can I claim for my Dashing?

If you needed to spend money to operate your business or make it profitable (it's necessary) and it's a normal expense for your type of business (it's ordinary), then according to the IRS it's a legitimate business expense. The IRS says it this way:

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business.

https://www.irs.gov/publications/p535

To keep this from getting too long and to avoid getting too far off topic, we won't go into all the different business expense categories or try to cover all the possible Doordash write offs. We have a more detailed article about Doordash tax deductions in our series, and another article that dives into each of the delivery driver expense categories here.

What does question 32 mean by if my investment is at risk?

On line 32 of Schedule C, you indicate if your investment is at risk if you had a loss. As gig economy contractors, we're probably thinking, what investment? Loophole Lewy explains it as well as anyone in the screenshot below: “as a sole proprietor you are using your own money for the business.” That's your investment. The loss comes out of your own pocket, so your investment is at risk.

You would only check that it's not at risk if there were outside interests that would absorb the loss. That's pretty rare for independent contractors.

Screen shot of at risk definition for sole proprietors from Loopholelewy.com

There's a spot for the home deduction. Can I claim a home office?

The IRS requires two things if you are going to claim space for a home office: 1) the space is dedicated to your business and is not used for personal purposes, and 2) a substantial part of your business operations happen in that space. In most cases, it's difficult to make a case that a significant part of our operations as an on demand food delivery driver happen in your home office. We go into more detail on the home office deduction for delivery and rideshare drivers here.

What do I do if I had more than one vehicle?

You should keep records separately for each vehicle. On a lot of tax software programs they'll have you input information for each vehicle and then it will generate a Part IV for each vehicle.

Was my vehicle used for personal use during off duty hours?

If you used your car for personal use outside your Doordash deliveries or other business driving, you would select yes. If you were strict about using the car only for business, you would put no.

Why would they ask if I have another vehicle for personal use?

I see this as a consistency check. For example, if you listed 100% of your miles for business use but then said you didn't have another vehicle available for personal use, that can raise some doubts.

What kind of evidence are they asking for in question 47?

The main thing they're looking for is if you have a record of your miles. The IRS requires a log that has a daily record of your business miles, showing date, miles driven, where you went and the business purpose.

I used Hurdlr or another GPS app to track my delivery miles. Does that mean it's not written?

As long as an acceptable mileage log can be printed out, that qualifies as a written log.

What's the purpose of Part V Other Expenses?

Screenshot of IRS form Schedule C Part V that says "Other Expenses. List below business expenses not included in lines 8-26 or line 30."

There are several expenses that 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. Without that description, it's easier for someone to just make up a number and stick it in ‘Other expenses.'

Some ‘other expenses' might be business subscriptions and memberships (think AAA or if you joined an online community of Dashers), Uber Eats service fees, etc.

This other expense section is one reason I'm not a fan of Quickbooks Self Employed or of Stride Tax. Neither one lets you create different “other” expense categories for tracking. Thus you get stuck doing a lot of work later.

What happens after Schedule C is done?

A marble like background  with stone type lettering spelling out Now What?

If your income was greater than your expenses, you made a profit. That profit is added to other income for purposes of figuring out your taxable income, and thus figuring out your income taxes. This part of our series goes into more detail about the rest of the income tax filing process for Doordash delivery drivers.

Income from your business is also moved to Schedule SE. Schedule SE is the form that calculates your self-employment tax.

If your expenses were greater than your income for your business, you had a loss. That loss may be deducted from other income for income tax purposes. Speak with your tax professional to determine if this is the best way to approach a business loss on your taxes.

If your net profit on Schedule C (or total net profit from all Schedule C forms if you had multiple businesses) was less than $400 you may not have to pay Self Employment tax. However, your total net profit does still get added to your other income for income tax purposes.

Something you should notice is that all of this is part of the income portion of your income tax process you go through at tax time. Schedule C is where your personal income is determined. That's an important point because of the fact that this is where your business expenses are taken.

Too many contractors make the mistake of thinking they have to itemize their tax deductions in order to claim business expenses. That's an expensive mistake.

From here, you'll go on and wrap up the rest of your tax process. We go into more detail in our Doordash Tax Calculator article, which helps think through what the tax impact is of your Doordash earnings.

Final thoughts and questions about Schedule C.

The basic concept behind Schedule C is pretty simple.

  1. Enter your personal and business information
  2. Add up your income for your business
  3. Subtract your business expenses
  4. The difference is the part that impacts your income and self employment tax bill.

That's it in a nutshell. Some of the details can get more involved which is why we have so many questions and answers on this page.

To wrap things up, we'll look at some more general questions about Schedule C. Then, at the end of those questions, we'll list links to all of the individual questions that we cover through this article so you can jump directly to the question.

Opening paragraph of 2020 Instructions for Schedule C Profit or Loss From Business in background, with label reading Questions about Schedule C

What is Schedule C

Schedule C is called “Profit and Loss From Business.” This is where you list your income and your expenses as an independent contractor for Doordash, Uber Eats, Grubhub, Postmates and other gig platforms. By completing a Schedule C you create what is essentially 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.

Can I file my Doordash taxes without Schedule C?

You should not file taxes as an independent contractor without a Schedule C. Schedule C allows you reduce your business income by claiming business expenses. It also makes sure all the right taxes are paid. If you skip the Schedule C, you skip important business deductions and thus pay higher taxes.

Should I create a new Schedule C if I also deliver for Uber Eats, Grubhub, Postmates or any others?

No. Independent contractor work for other food delivery services is the same type of business. You should not create multiple Schedule C forms for the same business code.

Should I create a new Schedule C if I operate a different type of business beside my Doordash contracting?

If you operate more than one type of business with a significant difference between the types of business, then it is a good practice to create a Schedule C for each business type. For example, I create a schedule C for my online business that is different than my Schedule C for delivery work. One is home based with office expenses while the other is out on the road.

If you do different styles of gig work that are similar, then it becomes a matter of choice. For instance, I think you can make a strong enough case for completing a single Schedule C for both. At the same time, if you prefer to keep them separate, they're different enough that two Schedule C's would be reasonable.

Screenshot from IRS Schedule C instructions highlighting the sentence: If you owned more than one business, you must complete a separate Schedule C for each business.

Can I use Schedule C-EZ for my Doordash taxes?

Starting with the 2019 tax year, the IRS phased out Schedule C-EZ. Schedule C-EZ was a simplified version of the form for some part time contractors. However, it is no longer an option.

Can I use Schedule C if this is only a side hustle?

It doesn't really matter if this is a full-time business for you or just a side hustle. Even those delivering for food delivery apps for just a few hours a week are still small business owners by law. That makes you eligible to claim business expenses.

Glossary of the frequently asked questions about Schedule C in your Doordash taxes

About Schedule C in General:

Dashing and the Business Information part of Schedule C

Questions about the Income section of Schedule C for Dashers

Questions about the Expense section of a Dasher's Schedule C

Where can I learn more about how taxes work for independent contractors in the gig economy?

This series of questions addresses the Schedule C specifically, especially from a Dasher's perspective.

The IRS has a special section with information on gig economy taxes. Elsewhere on this site is a series of articles on delivery based independent contractor taxes in our tax guide. You may find that series helpful as it addresses the topics in a broader manner. Finally we created a Doordash Tax Calculator to help you estimate the tax impact that your delivery profits will have.

Doordash Taxes: A Guide for Dashers

The Doordash Taxes series provides an overview of how taxes work for Dashers and delivery drivers who contract with other platforms. It includes several frequently asked question articles related to different parts of the tax process.

Could this help someone else? Please share it.

About the Author

Ron Walter made the move from business manager at a non-profit to full time gig economy delivery in 2018 to take advantage of the flexibility of self-employment. He applied his thirty years experience managing and owning small businesses to treat his independent contractor role as the business it is.

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.

Ron has been quoted in several national outlets including Business Insider, the New York Times, CNN and Market Watch.