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NeonNova

Can self-employed DoorDash income and 1099 contract work go under my LLC for tax purposes?

Hey guys, I'm in a bit of a tax confusion situation and hoping someone can clarify. I started my own LLC back in August but it's not generating enough income yet, so I've been driving for UberEats to supplement. UberEats will be sending me a 1099 at the end of the year, and I'm wondering if I can file those earnings under my LLC instead of as personal income? I'm completely new to how LLC taxes work. I also do some freelance photography editing for a company that pays me with a 1099, and that money goes directly into my business account. Same question applies - can this be considered business income for my LLC or will I be taxed individually on it? My plan going forward is to have all income flow through the business and then pay myself via W-2 from my LLC. But for this year, I'm thinking I'll probably have to do these as individual income since the LLC is so new. Any advice on how to structure this properly before January hits would be super appreciated! Just trying to get a handle on all this tax stuff before it becomes a headache.

You can absolutely include your DoorDash and freelance editing income as part of your LLC's business income. Since you've already established the LLC, you can funnel all your self-employment activities through it. For tax purposes, a single-member LLC is typically treated as a "disregarded entity" by default, meaning the IRS treats it like a sole proprietorship. You'll report all business income and expenses on Schedule C of your personal tax return. This includes both your DoorDash earnings and your editing contract work. The fact that your editing income already goes into your business account is perfect - you're on the right track there. Make sure you're tracking all business expenses for both activities as they can offset your income.

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But wait, if they want to pay themselves W-2 wages from the LLC as mentioned, wouldn't they need to elect S-Corp taxation instead of being treated as a sole proprietorship? I thought single-member LLCs can't pay themselves W-2 wages unless they make that election?

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You're absolutely right - I should have been more clear about that distinction. If you want to pay yourself W-2 wages from your LLC, you would need to elect S-Corporation tax treatment (using Form 2553). As a single-member LLC with default taxation (disregarded entity), you can't pay yourself W-2 wages - you'd just take owner's draws. With an S-Corp election, you could pay yourself a reasonable salary on a W-2 and potentially save on self-employment taxes for distributions above that salary. But this comes with additional requirements like running payroll, paying unemployment taxes, and more complex tax filings. For a new business just starting out, it's often simpler to operate as a sole proprietorship initially until your income reaches a level where the S-Corp tax savings outweigh the additional compliance costs.

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I was in a similar situation last year with gig work and my consulting LLC. I spent hours trying to figure out the tax implications until I found https://taxr.ai which literally saved me thousands. Their AI analyzed all my different income streams and showed me exactly how to categorize everything properly between business and personal income. What was super helpful is that they explained how to properly document business purposes for my gig driving to maximize legitimate deductions. They even identified expenses I was missing that were totally deductible! The system automatically structured everything correctly for Schedule C.

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How does it handle the S-Corp election question? I've been debating whether to make that switch for my LLC but I'm concerned about the extra paperwork and whether it's worth it at my current income level.

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Does it help with quarterly estimated tax payments too? That's what keeps messing me up with my DoorDash income - never know how much to set aside each quarter.

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They have a really useful calculator that helps determine the income threshold where an S-Corp election makes financial sense for your specific situation. It factors in your projected income, state taxes, and the additional compliance costs you'd face. It showed me I needed to hit about $40K in profit before the S-Corp route would save me money. For quarterly estimated payments, absolutely! That was actually one of the most helpful features for me. You connect your income sources and it projects your tax liability in real-time, then recommends exactly how much to set aside for each quarterly payment. It even sends reminders before each due date so you don't miss them.

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Just wanted to update after trying taxr.ai from the recommendation above. I was skeptical but decided to give it a shot since my tax situation with my side gigs and new LLC was getting complicated. I'm honestly surprised at how well it worked for my situation. It analyzed my DoorDash and freelance income streams and showed me exactly how to structure everything. Turns out I qualify for way more business deductions than I realized - especially for the car expenses related to gig driving. The S-Corp calculator was super helpful too. Based on my current income, it doesn't make sense to elect S-Corp status yet, but it showed me exactly what income threshold would make it worthwhile in the future. Definitely feeling more confident about handling my taxes correctly now!

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If you're planning to pay yourself a W-2 salary from your LLC, you're going to need to talk to the IRS about your tax election. I tried calling them 8 times last month about changing my LLC's tax status and kept getting disconnected or waiting for hours. Finally used https://claimyr.com and got through to an actual IRS agent in about 20 minutes. They have this cool demo video at https://youtu.be/_kiP6q8DX5c showing how it works. The agent walked me through exactly what forms I needed for my situation and answered all my questions about treating different income sources under my LLC.

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How does this actually work? Do they just call the IRS for you or what? Seems like it would be the same wait either way.

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Sounds kinda sketchy tbh. Why would they be able to get through when nobody else can? I've literally spent hours on hold with the IRS trying to sort out my business tax ID.

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They don't just call for you - they use some kind of automated system that navigates all the IRS phone prompts and waits in the queue for you. You get a text when they're about to connect with an agent, then they call you and conference you in with the IRS person. So you don't waste any time on hold. Their system basically monitors the hold queue and does all the waiting for you. It's not about cutting the line - you still have the same wait time that would normally exist, but you're not personally sitting there listening to hold music for hours. The difference is you get to go about your day until they've secured an agent.

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I have to admit I was wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my LLC's tax status before filing deadlines. It actually worked exactly as described. I got a text about 35 minutes after signing up saying they were about to connect with an IRS agent, and then my phone rang and I was talking to a real person. The agent clarified everything about how to handle my different 1099s under my LLC structure and explained the S-Corp election process. Saved me from making a pretty big mistake on my tax approach. I was about to file everything separately which would have cost me a bunch in unnecessary self-employment taxes. Sometimes it's worth admitting when you're wrong about something!

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One thing nobody's mentioned yet - you need to be really careful about commingling personal and business expenses with your LLC. Even with a single-member LLC that's a disregarded entity, you should keep everything separate. Make sure ALL your DoorDash deposits go into your business account, and track your mileage carefully using an app. Same with your editing income. The mistake I made my first year was being sloppy with this and it caused huge headaches at tax time. Also, track your startup costs for the LLC - those are deductible too!

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Thanks for this advice. I've been using a mileage tracking app but sometimes forget to turn it on. For the LLC startup costs, would things like the filing fee with the state and the cost for an operating agreement count as deductible?

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Yes, absolutely! State filing fees, legal fees for creating an operating agreement, costs for any professional advice related to setting up the business - all of those count as startup costs and are deductible. And for the mileage tracking, I'd recommend setting up reminders or maybe try a different app that has automatic tracking. Some apps can detect when you're driving and prompt you to categorize the trip. It's so easy to miss tracking those miles, and they really add up as deductions.

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Does anyone know if you can retroactively apply business expenses from before the LLC was officially formed? I did some DoorDash in May but didn't form my LLC until July (similar to OP's situation).

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You can deduct business startup costs from before your official formation date as long as they're directly related to creating the business. The IRS allows this for costs incurred within the year before you actually start operations.

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Great question! I went through something very similar when I started my LLC. Here's what I learned: Yes, you can absolutely run your DoorDash and freelance editing income through your LLC. Since you formed it in August, any income earned after that date can be considered business income. The key is being consistent - if you're treating these activities as business operations, make sure all the income flows through your business account (sounds like you're already doing this with the editing work). For tax purposes, your single-member LLC will be treated as a sole proprietorship by default, so you'll report everything on Schedule C of your personal return. This actually works out well for gig work since you can deduct all your business expenses - car expenses, phone bills, equipment costs, etc. One important note about the W-2 plan: you can't pay yourself W-2 wages from a single-member LLC unless you elect S-Corp tax treatment. If that's your goal, you'll need to file Form 2553 to make that election, but honestly, for a new business, the sole proprietorship route is usually simpler until you're making enough profit to justify the extra paperwork. Make sure you're setting aside money for quarterly estimated taxes since you won't have withholdings like a regular job. I'd recommend about 25-30% of your net profit to be safe.

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This is really helpful, thanks! The quarterly tax payments are definitely something I'm worried about. Do you have any recommendations for how to calculate those estimated payments when your income is so variable with gig work? Some weeks I make $200 with DoorDash and other weeks it's $600 depending on how much I drive. Same with the editing work - it's pretty inconsistent. I'm nervous about either underpaying and getting hit with penalties or overpaying and tying up cash I need for business expenses.

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For variable gig income, I'd suggest tracking your weekly earnings for a few months to get an average, then use that to project quarterly income. A simple approach is to set aside 25-30% of each payment immediately when it hits your account - that way you're not scrambling at quarter-end. You can also base your estimated payments on last year's tax liability if this helps avoid underpayment penalties. The IRS safe harbor rule says if you pay 100% of last year's tax (or 110% if your AGI was over $150k), you won't get penalized even if you owe more. For the variability issue, I actually keep a separate "tax savings" account and transfer the percentage immediately after each gig payment. When quarterly payments are due, I just use whatever has accumulated. If I've saved too much, it becomes a nice refund; if too little, at least I'm not starting from zero.

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Just to add another perspective - I've been running my LLC for about 3 years now and started exactly where you are. The transition from individual gig work to business income can feel overwhelming, but you're asking all the right questions. One thing that really helped me was opening a dedicated business checking account if you haven't already. Even though your LLC is a disregarded entity for tax purposes, having that separation makes tracking so much cleaner. I deposit all my DoorDash and contract payments there, then transfer a set amount to personal for living expenses. Also consider getting a business credit card for expenses like gas, phone bills, and car maintenance. It makes tracking deductions way easier at tax time, and you might get better rewards rates for business spending. The W-2 salary idea is smart for the future, but honestly, don't stress about it this first year. Focus on getting your bookkeeping systems solid and tracking all those deductible expenses. Once you're consistently profitable and the S-Corp election makes sense financially, you can always make that change later. Keep detailed records of everything - mileage, receipts, income sources. Your future self will thank you come tax season!

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This is exactly the kind of practical advice I needed! I actually just opened a business checking account last week but haven't been using it consistently for all my DoorDash deposits - I've been letting some go to my personal account out of habit. I'll start being more strict about that separation. The business credit card idea is brilliant too. I've been using my personal card for gas and car expenses then trying to sort it all out later, which is a nightmare. Having a dedicated card would make expense tracking so much simpler. You're right about not stressing too much about the S-Corp election this year. I think I was getting ahead of myself because I read about the potential tax savings, but it sounds like I should focus on getting the basics down first. Better to have clean books and understand the process before adding more complexity. Thanks for the reassurance that this overwhelming feeling is normal! Sometimes it feels like everyone else has it figured out and I'm just fumbling through.

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