Choosing the Right Accounting Method for Doordash Independent Contractors

As a Doordash independent contractor, one of the important decisions you need to make when it comes to your taxes is choosing the right accounting method. The accounting method you select can have a significant impact on how you report your income and expenses, and ultimately, how much tax you owe. In this article, we'll explore the two main accounting methods - cash basis and accrual basis - and help you determine which one is best for your Doordash business.

Understanding Cash Basis Accounting

Cash basis accounting is a straightforward method that recognizes revenue and expenses when cash is received or paid out. In other words, you record income when you actually receive payment from your customers, and you record expenses when you make the actual payment. This method is simple and easy to understand, making it a popular choice for small businesses and independent contractors like Doordash drivers.