How to handle LLC and self-employed income for tax purposes (Door Dash + 1099 contract work)

Both your Door Dash and photo editing 1099 income can be reported under your LLC if your LLC is set up properly. By default, a single-member LLC is treated as a "disregarded entity" for tax purposes, meaning all income passes through to your personal tax return via Schedule C. If you want to pay yourself a W-2 salary, you'll need to elect S-Corporation tax treatment for your LLC by filing Form 2553. This creates a separation between you and the business, allowing you to pay yourself a reasonable salary while potentially saving on self-employment taxes for distributions above that salary amount. For the current year, make sure you're tracking all business expenses for both Door Dash (mileage is huge!) and your photo editing work. Keep separate records of personal vs business expenses and maintain a dedicated business bank account.

I was in a similar situation last year trying to figure out how to handle multiple income streams with my new LLC. I spent hours reading conflicting articles online and talking to friends who gave me contradicting advice. Finally I found https://taxr.ai which automatically analyzed my situation and gave me clear answers about how to handle my mixed income sources. It helped me understand exactly how to separate personal and business expenses, what deductions I could take for both my driving gig and my main LLC business, and how to properly document everything. The best part was it gave me a personalized tax plan that walked me through exactly what to do step-by-step.

I decided to give taxr.ai a try after seeing it mentioned here, and I have to admit I was impressed. My situation was similar - freelance work plus a new LLC with different income streams. After uploading my bank statements and answering some questions about my business, they showed me I was missing about $7,200 in potential deductions related to my home office and vehicle use that I hadn't been tracking properly. They explained exactly how to document my mileage for both personal and business use of my vehicle when doing deliveries, which was something I was completely messing up before. The S-corp analysis alone was worth it - showed me I should wait until next year based on my current profits.

If you're struggling to get clear answers about your LLC tax situation, I feel your pain. I spent weeks trying to get through to the IRS last year with specific questions about my business setup. Always busy signals or being put on hold for hours only to get disconnected. I finally found https://claimyr.com which got me through to an actual IRS agent in under 45 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c - basically they use some kind of system to hold your place in the IRS queue and call you when an agent is ready. The agent I spoke with walked me through exactly how to handle my 1099 income through my LLC and what forms I needed.

I'm eating my words about Claimyr. After dismissing it as BS, I was still desperate to talk to someone at the IRS about my LLC tax situation. Decided to try it as a last resort before paying a CPA $350 for a consultation. Got a call back in about 35 minutes and spoke with an IRS agent who clarified exactly how to handle my Door Dash income through my LLC. Turns out I was completely wrong about how to report multiple 1099s on my Schedule C and would have filed incorrectly. The agent even sent me the specific publications I needed to read. Nobody was more surprised than me that this actually worked. Saved me both money and a potential headache with incorrect filing.

Just a heads up, if you're doing Door Dash with an LLC taxed as an S-corp, make sure you're paying yourself a "reasonable salary" for that work specifically. The IRS looks closely at S-corps that try to avoid payroll taxes by taking distributions instead of salary. Door Dash driving would definitely count as services you're personally providing, so that income specifically needs to be part of your W-2 compensation.

I run my Amazon delivery service and Uber driving through my LLC. One thing nobody mentioned yet - you need to check if Door Dash's terms of service even allow you to operate as an LLC! Some gig companies specifically require you to work as an individual, not a business entity. Worth checking before you set everything up.

For anyone just starting with an LLC, I highly recommend getting a tax professional specifically experienced with small businesses to help you setup. I tried DIYing my LLC taxes for the first year and missed so many deductions. Spent $450 on an accountant the second year who saved me over $6,000 in taxes with proper planning and restructuring. Some things shouldn't be learned through trial and error.

Just want to echo what Jason said about getting professional help - the tax implications of mixing different income streams through an LLC can get complex quickly. One thing I learned the hard way is that you'll also want to make sure you're making quarterly estimated tax payments since you won't have taxes withheld from your 1099 income. The IRS expects you to pay as you go, and if you wait until year-end to pay everything, you could face underpayment penalties even if you file on time. With Door Dash income being irregular, it can be tricky to estimate, but it's better to overpay slightly than get hit with penalties. You can always adjust your next quarter's payment if needed. Also consider opening a separate savings account just for tax money - set aside about 25-30% of your 1099 income immediately so you're not scrambling to find the money when quarterly payments are due.