Doordash has a new 1099 process in 2022 with what seems like a new processing partner.
How does this 1099 thing work this year? How can Dashers get their 1099-NEC from Stripe. And then, how do you know if the 1099 is correct?
We're going to look at all things Doordash 1099 here. We'll talk about the following:
- Why did Doordash switch from Payable to Stripe?
- How do we get our 1099's for Doordash?
- Has Doordash improved their 1099 process this year?
- How do you know if your 1099 from Doordash is correct?
- Why is this important?
Why did Doordash switch from Payable to Stripe?
If you've been delivering for Doordash for awhile, you may have noticed a difference in how they got your 1099 form to you.
In the past, Doordash worked with Payable.com to process 1099 forms. Payable had a system that was used by a handful of gig economy companies including Lyft, Instacart and Doordash. If you delivered for Doordash in previous years you may have received emails instructing you how to get your forms through Payable.
Last year, you may have noticed a change in Doordash's communications. “Doordash is working with Stripe and Payable to e-file and deliver your 1099-NEC form for the 2020 tax year.” But then this year, Doordash is directing us to Stripe.
Why the change?
It wasn't that Doordash changed. In 2017, Stripe bought Payable. Payable continued to operate as its own entity for a few years after that.
In May of 2021, Doordash sent out an email with the subject “Heads up: Payable is shutting down.” Basically, it's like a lot of tech mergers where eventually everything is brought under the parent company's name and brand. It's probably not all that different than Uber Eats shutting down the Postmates Fleet platform and bringing it all onto their own app.
The bottom line is, Stripe just ended up streamlining things. Payable was getting a lot of their information from Stripe when running the numbers and creating the 1099 forms. I think it made more sense to quit using a third party company that was now owned by Stripe, and a lot more efficient to bring that all in under one operation.
There were a lot of problems with Doordash 1099 forms being incorrect in the past. I'm hoping this change will eliminate a lot of that.
How do we get our 1099's for Doordash?
Doordash is required to send out 1099 forms by the last day of January. If they are mailing 1099's, they only have to have the forms in the mail by then. If the 31st falls on a weekend or holiday, the deadline is moved to the next business day.
In years past, they have had the forms ready by the 28th of the month. That's been my experience. However, don't plan on earlier than the 31st.
Stripe now has a portal called Stripe Connect. When your 1099 form is available, you'll be able to download that there. You can also opt to have the 1099 sent by mail.
You should have received an email from Stripe with the subject line “Confirm your tax information with Doordash.” Following the link sent in that email would have you verify your information through your account.
If you didn't receive that invitation email, another option would be to try to log into Stripe Connect directly. You can go to connect.stripe.com/express_login. Enter the email account you use to log into your Dasher app. Stripe will send a text to have you verify access to your account.
Stripe may have you verify some other information. Eventually you should land on a home page that looks similar to this screenshot below.
Here you will have two tabs at the top of the page. One tab for Earnings and the other for Tax Forms. Under the Tax Forms tab, you can see 1099 forms listed. If you worked with other gig companies that also used Stripe, you may see 1099 forms for them as well.
Has Doordash improved their 1099 process this year?
I can remember for the 2018 and 2019 tax seasons, Doordash was terrible about putting out inaccurate 1099 forms. Usually it was the 1099 showing more than what drivers actually made.
I don't know how Doordash's system works. I can tell you that it's impossible to get any kind of Doordash earnings report from Doordash or their app. They only keep records on the app going back a few months. They used Stripe to make payments to their contractors. Payable would then run tax reports based on Stripe's records and Doordash's records.
I wonder if all the third party stuff is part of why Doordash 1099 forms were a mess. When you have to get your information from multiple systems for hundreds of thousands of Dashers, it just opens the door to errors.
There are two things that make me think things will be better for 2022 (2021 tax year) and one thing that concerns me. In the end, I think the fact that Stripe is streamlining things means that there's maybe one less place for errors to happen.
Two signs of improvement.
The first thing that impressed me about the Stripe Connect portal is the earnings history.
If you click on the Earnings tab, you can get a list of all of the deposits you have ever received from Doordash. I can go all the way back to my first deposit from March of 2018.
This is a big deal, in my opinion. Doordash has never given us access to an extensive history like this before. I feel like it's a huge step forward.
The second thing that impressed me for the 2021 tax year was that they published a draft 1099. On January 14, Stripe sent an email to Dashers to “Review your Draft Doordash 1099 form.”
There was good news and bad news in them doing that. The good news is, it looks like they are taking steps to make sure there's not a huge problem with inaccurate forms like in years past. If enough people respons that there's a problem, they know they need to fix something BEFORE finalizing the 1099 and sending it off to the IRS.
The bad news is that they did not provide a way to contact anyone if there was an error. The email says “Doordash may continue to make changes to your form until it is finalized.” I cannot find any contact information anywhere for reporting an error on the Draft 1099.
The Stripe Portal only says contact Doordash. And then on their tax help page, Doordash says contact Stripe.
If you have received a draft that appears to be incorrect but haven't received a final version, you can email Doordash support at Support@Doordash.com, and copy Stripe support at firstname.lastname@example.org. Send the email from the email account that you use to log in to the Dasher app.
One sign that the changes haven't fixed everything
Unfortunately, Doordash still doesn't have everything set up under one system. Stripe still has to get data from other places to create your 1099, and I fear that could open the door to more problems.
This time, the problem is with the DasherDirect card.
Doordash introduced their Dasher Direct debit card this past year. Instead of messing with third party debit cards for Instant Pay (at $1.99 a pop) the Dasher Direct card lets you get paid directly to that debit card with no processing fee.
But here's the problem. That means there's two different ways Doordash pays people.
Direct Deposit or ACH deposits to your bank account and the old school Instant Pay to your personal debit card are processed by Stripe. Dasher Direct payments are handled by a company called Payfair.
To make matters worse, Dasher Direct payments don't show up in the Stripe earnings report.
Dashers who had earnings deposited through Dasher Direct should also check their Payfare account (via the app DasherDirect by Payfare), because DasherDirect deposits are not reflected in Stripe Express.Part of response to “How can I get my 2021 DoorDash earnings history? in Doordash's Dasher Guide to Taxes
In other words, Stripe doesn't know everything that Doordash paid out. Stripe has to get a report of all of the payments to DasherDirect accounts and add that to their existing data in order to have the 1099 forms.
Given Doordash's history in the past with 1099's, I won't be surprised to see a lot of 1099 errors still because of this.
How do you know if your 1099 from Doordash is correct?
You need to know what you were paid and compare it to your 1099.
The best way to do that is to keep good records. Use an app like Hurdlr and enter your payments that you receive into the system every week. If you're keeping good records, you can immediately know how much you had by running a Profit and Loss report.
The second thing you can do is compare your bank account records to the earnings in Stripe Express.
- Pull up your Stripe earnings record.
- Open up your online banking or get your bank statements.
- Compare every line in the Stripe record to your bank records. Make sure every Stripe deposit record matches your bank records.
- Look for Doordash payments in your bank records that don't match the Stripe record.
- Note: if the deposit was an Instant Pay deposit, you may see a difference of $1.99. That's for the processing fee.
- Add up every single deposit for the year from Stripe's list.
- If you use DasherDirect, add up all the payments from them (you can get them in the Statements part of the DasherDirect app).
- Add your Stripe total to your Dasher Direct payments. Do they match your 1099?
Don't rely on the “Total Earnings” number even if you selected “Past Year” in the dropdown that's circled in the Stripe portal screenshot above. That total is for the past year from the current date. Stripe doesn't have an option to pull up records for a full calendar year.
Also notice in the screenshot that there are two line items for each deposit. One is money received from Doordash by Stripe. The second is where Stripe sent the money (your deposit). When adding up, make sure to only add one time for each, not both.
If any of the line items in Stripe have discrepancies with what went into your bank (other than the $1.99 fees) or if your total of Stripe and Dasher Direct don't match your 1099, your 1099 is probably incorrect.
At this point you need to make sure Doordash gets it correct. We write more about what to do if your 1099 is wrong here.
Why is this important?
Here's the thing: Doordash is also telling the IRS that you received whatever amount of money they put on the 1099.
If they tell the IRS you made more money than you did, the IRS is expecting you to report the extra money on your taxes. If you don't report as much as they think you made, you get a nice little note from them.
You are only obligated to pay taxes based on what you actually made. If you made $5,000 from Doordash, that's where you start with your taxes. The problem is, if you made $5,000 and Doordash tells Uncle Sam you made $10,000, that puts you in the spot of paying taxes on an additional $5,000.
If you're paying attention, you can stop that from happening. Doordash is required to provide accurate information.
But what if it's the other way around? What if you made more than Doordash says?
The problem with that scenario is, Doordash has been known to figure it out much later, and then send off a corrected 1099 form. If you filed taxes that list that you received $5,000 from Doordash, and a few months later Doordash says hey, it was actually $10,000, the IRS can still come to you and ask why the difference.
It's just better making sure everything is correct by the time you file your taxes.
You're running a business here, whether you feel like it or not. Stay on top of things with your business and make sure you don't get stuck paying in more than you are supposed to.