What do I do if my Doordash 1099 is wrong, especially when it reports too much income?
Obviously, 1099's from other gig apps could be off as well, so a lot of this applies if your Grubhub 1099 is wrong, your Postmates or Instacart 1099 is too high or your Uber Eats 1099….
okay, we're just leaving Uber Eats alone. They're a different beast – You can read more on the Uber Eats 1099-K here.
The reason I'm focusing on the Doordash 1099's being wrong is, that's where I'm seeing a flood of reports.
I'll admit, my gut reaction at first was, your 1099 probably isn't wrong, you probably aren't aware you made THAT much.
But then I realized, I'm not seeing this happen with Grubhub or Postmates drivers. It's all happening in Doordash forums. Something's wrong over there.
Here are four steps to take when your Doordash 1099 is wrong.
Step One if your Doordash 1099 is wrong: DO NOT IGNORE IT
Okay, Do not Ignore is not really a step, is it?
But it's just that important that I'm leaving it there. Or you can say “take this seriously” or whatever.
Because this is serious. If you don't react and if you don't take this seriously, overstated earnings by Doordash can and will take money out of your pocket.
You might hear from some articles that it's a month before they have to actually submit to the government. That is true on some situations, but the kind of income that is reported for us requires them to have submitted this information by January 31.
That means that if your 1099 is wrong, Doordash has already told the government that you made more than you really did. That's a problem.
Granted, in some situations they could have told the government you made less than you actually did. Isn't it a little fishy that almost all errors are reporting too much?
Why is this so important?
Say for instance you're in the 10% tax bracket.
If Doordash tells the IRS that you made $1,000 more than you really did.
If you just go off their 1099 and add it as recorded, you end up paying $253 more in taxes than you should be. $153 is self employment tax and $100 in income tax.
I mean, if you're okay paying $253 more in taxes for every $1,000 they get wrong on your 1099, just go ahead and ignore it.
But couldn't I just report my actual earnings?
You could, but you have some headaches coming up because of it.
Here's your issue: That 1099 is just a copy of what Doordash is reporting to the IRS that they paid you.
One of the first things the IRS computers do when evaluating tax returns is they compare what you say you earned and what others say you earned.
If what others say you earned is higher than what you say you earned, the IRS is coming after you to ask you why you didn't report all your earnings.
Even if you were 100% legitimate in what you reported, that's just a headache you don't want. You're not in a position of proving what your earnings were. You are also in a position where the possibility of an audit has gone up exponentially.
Do not ignore this and do not file until this has been fixed.
It is essential that you make sure that Doordash has fixed things on their end before you file your taxes. Be a bulldog about this.
Step Two: Know what you actually received.
Now I am going to say, there ARE people who think their earnings were less because, let's be honest, they just weren't paying attention.
I think that's especially true when you do this on the side and use the instant pay. You go out, you deliever, you cash out, you spend the money. When you do that, sometimes you don't realize just how much you actually brought in.
A few dollars here or there end up being hundreds or thousands by the end of the year.
Do NOT, I repeat, DO NOT rely on the earnings tab in the app to determine what you made.
You can go into the app and click the earnings tab and scroll down to see what you made. If you are using that as your basis, it's very easy to think you earned less. That's because all of your earnings for the year aren't going to show up there.
For whatever reason, Doordash in their infinite non-transparent wisdom has decided that they will pull your earnings detail off the app after a few months.
It doesn't make sense. Is it that their app won't support storing that much data? It's such an embarrassment of an app that who knows, right?
You might see some numbers from earlier months but those are usually very small.
Doordash has made a big deal out of being more transparent, and yet you cannot go into their app or log into their website to pull earnings records from them. You can do that with everyone else.
Request a history from Doordash.
(Note – this section was added after publication based on good advice that I saw from Youtube creator UDM who has been a guest on our podcast.)
Doordash posts on their website that you can request a payment history. They state that ” To receive proof of the payments you have received from DoorDash for your independent contractor work, please file a support case using the link below. For us to process your request more quickly, be sure to include the email address that is associated with your Dasher account.”
There is a high probability that Doordash will NOT provide a history.
Youtube creator UDM pointed this article out on his community, which prompted me to add this section.
But the interesting thing is, he followed that link and got a response: ” Although we cannot provide you your total earnings for 2019, but I can help you on how you can get that on your App. All Dashers can verify a history of pay through the Dasher app by visiting the Earning page.”
Instead of providing a history, they point him to the Earnings tab on the app that I just warned was incomplete.
The other issue with this is, the Earnings tab is not documentation of payment history. It shows earnings, but does not document when and where payments were paid out.
Request the earnings history anyway
Who knows? Maybe someone will receive this and actually help. IF you do receive documentation, obviously you want to compare that to your bank statements as well as your 1099.
If you get an actual earnings history, can you leave a comment below and let me know? I'm just curious as to whether it ever actually happens.
If you get a similar response to what UDM received, you have documentation. One, you documented your attempt to get information. Two, you document issues with receiving the information you requested.
There IS an option available that can pull your entire earnings history from your app.
David Pickering of Para joined us on the podcast in December 2020 to talk about some of the things they're working on. They recently launched a tool that can pull the entire trip history for the year on Doordash and several other apps.
The app does this by connecting to your Doordash account. I've written before that there could be some issues providing access to third party apps based on new language in the Independent Contractor Agreement. David assures me their data provider has secured permission to connect to Doordash accounts. This would eliminate worries about unauthorized access.
Two things to note when you connect: One, the app does take some time to go through all the data. I'd say it took at least 15 minutes before I could see the whole year. So, give it time.
The other thing is to be aware that this totals up your day to day earnings on Doordash. If you earned money for deliveries in the past few days of a year but payment was received after the 1st, Doordash considers that earnings for the new year.
I tested out Para's app and it was spot on.
I subtracted my totals from December 28-31 of 2020, then added earnings from December 30-31, 2019. When I did that, the total on Para matched my earnings on my Doordash 1099 to the penny.
I took this a bit further and went week by week to confirm that my deposits were correct. They were. In other words, what Para reports, what Doordash reported, and what my actual deposits totaled up to all matched up to the penny.
I'm a little stunned, to be honest. The information is actually available in the data. Why can't Doordash make that earnings history available themselves in their app.
Go through your bank records and add up all money received from Doordash.
It's really the only way you can get an accurate picture of what you received.
Log into your bank account or pull out your paper statements from the bank and start from the beginning of the year. Write down every deposit that came from Doordash.
Double check it, go back through again and make sure you haven't missed anything.
Check all your bank accounts
Did you change banks anywhere during the year? Be as thorough as you can.
And don't forget to add in Instant Pay
A lot of people who use Instant Pay and cash out early use a debit card or bank account that is different than the one your direct deposits go to.
If you take almost everything in Instant Pay and that's what you added up, maybe don't forget to check the bank your direct deposit goes into.
Finally, IF you use Instant Pay… don't forget the transaction fees. If you made $1,000 from Doordash but had $10 in transaction fees for the Instant Pay feature, your deposits will only add up to $990. However, $1,000 is the amount Doordash would report as your earnings.
As I understand, you get an email that shows the transaction fee, so you want to make sure you add all of those up.
By the way, how much DID you pay in cash out fees? If you're cashing out several times a week, that can add up to even hundreds of dollars by year's end. What could you do with that money? If you listen much to Dave Ramsey, he gets pretty harsh about that kind of thing – he calls it Stupid Tax. Whatever you call it – if that amount stuns you at all, seriously think about if the Instant Pay is a good strategy.
Add it all up and compare it to your 1099.
Add everything. If you're using a calculator double and triple check your math. If you put it all in a spreadsheet make sure everything is entered correctly.
You want an exact amount. What did you make? How does that cmpare to your Doordash 1099 and is that 1099 wrong?
Step Three When Your Doordash 1099 is Wrong: Request (DEMAND) a Correction.
You need to contact Doordash immediately.
I do hear of some people advising you go first to the IRS.
Honestly, when the issue is happening at this kind of scale, I can understand that. Something about this whole thing is fishy and I'm not going to argue with anyone that thinks the IRS's attention needs to be drawn to this.
However, I just feel like it's best to at least go through the motions.
Contact the IRS and ask them to provide you a corrected 1099. Use that exact terminology. It HAS to be a CORRECTED 1099, otherwise it can be taken as an additional 1099 and that adds up to even additional earnings being reported to the IRS. Document everything you do when contacting them.
Doordash Contact information for when their 1099 is wrong
If you received your 1099 through Payable.com, when you click to open the 1099 form there's a link on the bottom to Request a Correction.
When you click that it pops up with contact information to request a correction: Call 855-973-1040 or email Support@Doordash.com.
I would suggest you do both. In fact, I would even suggest you go a step further and send a DM to DoordashHelp on Twitter (@DoordashH) and request it through them. Do all three.
Document it all. Write notes from the phone call, ask for identification information from who you talk to, ask for a case number, write down specifically what was discussed, all of that.
Note the date and time of the phone call – even make a screenshot of the call information if you used your call. Screenshot or print your email (and any replies) and your tweets related to it. Do it all. Keep a record of everything and of all the replies.
Be a bulldog.
I wouldn't be afraid to go so far as to state that if you aren't getting a response, you will take this to the IRS.
That may or may not get a better response. Realize you may not be talking to an actual Doordash employee, so they may not care. It's great if it helps, if it does not, you've at least done what you need to do. If you aren't getting a response in an appropriate time, follow up.
Step 4: If you get a corrected Doordash 1099, make sure it IS corrected
There is a box on the top of the 1099 form. Make sure that has been checked. If it is not, you need to go through the whole process. If they sent a second one and it is not checked, there is a possibility that the IRS sees this as ADDITIONAL earnings, not a correction.
If you do not get a corrected copy:
Here's where it gets way over my head, to be honest.
Do you report to the IRS?
This goes back to what I said above where some are suggesting you report it to the IRS.
There is a link where you can go to the IRS to report suspected tax fraud. You need to understand that doing so does not have much likelihood of resolving your particular situation. What that will do is lead you to file a form called Form 3949-A. This is a form that you would mail in.
I'll be honest, I'm torn as to whether that's a good next step. Here's the thing with that – using that form is NOT going to expidite your particular case. It probably isn't going to help your particular case at all. That is NOT the purpose of this form. This form is more about drawing attention to what you think could be fraudulent activity.
But is it? There's a difference between failure to respond and fraud. The scale of this and the fact that it seems like it's been an issue before makes you wonder if this isn't a smoking gun to something illegitimate going on with the books at Doordash, but… is that a stretch to call it fraud?
Everyone's going to have different views on that question. If you think it is, you could use this form, you could include copies of your documentation and include copies of your bank statements when mailing the form in. But again, understand this will NOT likely help you with your situation.
If you have not received a corrected 1099 and your filing deadline is looming.
At this point, you really should be consulting with a tax professional. Have them help you figure out your next steps. My understanding is you have two choices:
File an extension to get more time to get this resolved.
(Remember that filing an extension is not the same thing as delaying payment. You will want to know exactly what you think you will owe and you WILL want to make that payment on or before April 15).
The main reason for the extension is that it just allows more time for the 1099 situation to be updated with the IRS before your tax filing is submitted. If at all possible you want to avoid a situation where your reported earnings are less than what the total earnings reported on 1099's are.
File your return with a statement about the incorrect 1099.
I'm not going to attempt to tell you how to do this. This is where you need a tax professional to help you with that. They can walk you through how to state that, and if and how it is best to document your actual earnings.
Why are so many Doordash 1099's wrong?
I don't know. Maybe in the end, the why doesn't matter. They need to fix it.
I remember a lot of reports of them being wrong last year, of many saying they needed corrections last year and even for other years. This seems like an ongoing problem.
I wonder if it's related to them pulling earnings detail off the app after a few months. The only reason that I can think this would happen is that it's too much data to store in their system.
Their whole tech infrastructure seems wonky at best, totally incompetent at worst.
That's kind of ironic considering they insist they are not a delivery company but a tech company. If they are that bad at tech, it's no wonder they aren't all that great at delivery.
Is it related to what they do with that earnings data? This would suggest they don't have a place where individual earnings data is kept from the get go.
Like it's stored in the dispatch program, and then it's pulled and moved somewhere else? But when that happens, do some deliveries get duplicated in that system?
But how does a company THAT massive get away with a system so poorly designed if that's the case? Is it even POSSIBLE to be THAT incompetent?
Or is there a conspiracy theory to pursue here???
And I think that's why a lot of people wonder if there's something else going on. Is there over reporting here to make up for something that isn't right somewhere else?
Are they over-stating what they are paying out so they can claim Dashers make more than what they really make, only to adjust later?
Is this a smoking gun to something bigger? If that's the case, it sure makes you wonder if this is the tip of the iceberg of something Enron-level, you know?
If you are impacted by a wrong 1099, stay on top of things.
Again, DO NOT IGNORE this. Check your earnings, make sure your 1099 is correct. If it isn't, hound them.
DO NOT PAY TOO MUCH IN TAX because of Doordash's mistake. If it is a mistake…
If you were impacted, I'd like to hear from you. I'd love to know how they responded when you contacted them and if, when, and how things get resolved. You can comment or more privately shoot me an email through the contact page.
Was your 1099 from Doordash wrong?
Comment below if it was.
- Don't just sit there. Do something! This is serious. If you file using inflated Doordash 1099 numbers, you pay way too much in taxes. If you file using the right numbers, the IRS has a copy of the inflated Doordash 1099 numbers, and they'll think you're under-reporting.
- Know what you really made. You won't get this from the Doordash app. They only keep a few months records. Go through your bank records. ALL OF THEM (especially if you use instant cash out). Get a book keeping program like Hurdlr and add up everything and make sure you know what the right amount should be.
- Demand a correction. Contact Doordash immediately. Demand they get it corrected immediately. They have a responsibiility to submit the right information. Hound them, be a dog with a bone.
- Make sure the correction is corrected. MAKE SURE that the "corrected" box is checked. Compare it to your actual numbers and make sure it's right this time.
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