As a Dasher for DoorDash, you may feel confused about how to get your DoorDash tax return completed this year.
DoorDash used Payable to help its food delivery drivers with their taxes in the past.
However, as of June 15, 2021, the Payable DoorDash relationship ended when Payable announced that it needed to shut down its business.
This article will explain how Dashers get their 1099 tax form from DoorDash and what you need to do to file your taxes correctly.
Does DoorDash Use Payable for Taxes?
The Payable DoorDash relationship ended in 2021.
DoorDash needed to find a new payment and tax solution for its Dasher delivery driver team because Payable announced a shutdown.
What Was Payable From DoorDash?
Payable was a service that helped independent contractors file and pay their taxes.
Many gig economy companies, including DoorDash, used the service.
Access to Payable Has Ended
As of June 15th, 2021, Dashers can no longer access their account on Payable.
If you try to log in, you will see a message that says, “access to Payable has ended.”
How Do I Get My Form 1099 From DoorDash?
DoorDash now delivers the 1099-NEC form to its delivery driver team via Stripe.
For tax purposes, the document details your earners throughout the year paid to you by DoorDash.
It’s only provided if DoorDash paid you more than $599.
Using the new Stripe Express feature with DoorDash, you can update all tax data, download forms, and track earnings.
If you’re a Dasher who made more than $599 through DoorDash in 2021, then they will send an email inviting you to create an account & log into the app.
What Does This Mean for My Business?
If you’re a DoorDash driver, this means you will no longer use Payable to help with your taxes.
You will still need to file and pay your taxes as an independent contractor.
The only difference is that now, instead of using Payable, you will get your form from DoorDash via Stripe Express.
You also need to understand the following three business structures to file your taxes correctly.
Sole Proprietor
You report all business income and expenses on Schedule C of your personal tax return when you’re a sole proprietor.
Self-Employed
If you are self-employed, you must file Form SE (self-employment tax).
You will also need to pay both the employee and employer portions of Social Security and Medicare taxes.
Independent Contractor
Independent contractors are not employees.
As an independent contractor, you must file a Schedule C and include all earnings from your DoorDash business.
You are also responsible for paying self-employment taxes.
What’s the Difference Between Sole Proprietor, Independent Contractor, and Self-Employed?
The main difference between these three business structures is who pays the taxes.
As a sole proprietor, you use Schedule C.
On your personal tax return, you’ll pay both the employee and employer portions of Social Security and Medicare taxes.
The structure is simple to set up and maintain but offers fewer tax breaks than the other two structures.
If you are self-employed, you will also need to pay both the employee and employer portions of Social Security and Medicare taxes.
In this case, you’ll use Form SE.
The structure offers more tax breaks than a sole proprietorship.
However, it is more complicated to set up and maintain.
Independent contractors are not employees.
As an independent contractor, you will file Schedule C.
The schedule attaches to your personal return and reports your DoorDash earnings.
You are also responsible for paying self-employment taxes.
You will need to file and pay your taxes no matter which business structure you choose.
DoorDash has made it easy for its drivers to do this by providing the form via Stripe Express.
Make sure you understand which format applies to you to file your taxes correctly.
What Does This Mean for My Connected Accounts and Contractors?
You will need to disconnect any association you previously had with the Payable platform.
Instead, it’s time to start using the Stripe Express account to get your DoorDash tax information.
Look for the email from Stripe that provides instructions for setting up the new account with them.
The email will say this in the subject line, “Confirm your tax information with DoorDash.”
Open the email and click on the “Verify” button.
From there, you can set up your new Stripe Express account.
Make sure that all of your information looks correct in the new system. Specifically, check your:
- Employer Identification Number (EIN)
- Social Security Number (SSN)
- Name
- Address
- Other important personal information.
If you don’t get the new Stripe account set up in time, DoorDash will mail the 1099-NEC form to the address you have on file with them.
Where Do I Go for Support?
Don’t contact DoorDash if you run into any problems with the new system.
Instead, you must contact the Stripe customer service staff.
You can do so on this Stripe customer support page.
You might wonder whether your tax information remains secure with Stripe.
Stripe reports that they use top-notch security tools to keep all sensitive tax information encrypted and safe.
If you want more information about this, you can learn more about Stripe’s security safeguards here.
How to File Your DoorDash Taxes: Everything You Need To Know
You may still have questions about how to pay the taxes owed on your DoorDash earnings properly.
That’s understandable, as the issue of taxes always brings questions for all types of businesses.
Let’s review several essential matters to consider.
What DoorDash Taxes Do You Have To Pay?
As a DoorDash independent contractor, you’re responsible for paying FICA and income taxes.
FICA Taxes for Dashers
The Federal Insurance Contributions Act (FICA) requires that all workers pay a Social Security tax and a Medicare tax.
The current Social Security tax rate is 12.40% of your income (6.2% for the employee and 6.2% for the employer), and the Medicare tax is currently set at a rate of 2.9% (1.45% for the employee and 1.45% for the employer).
You are responsible for paying both the employee and employer portions of these taxes.
However, there are different percentages to pay based on tiers of income.
If you have any questions, contact your accountant.
Income Taxes for Dashers
Federal and state income taxes are also due on your DoorDash earnings.
The amount of tax you’ll owe depends on how much money you make during the year.
It’s important to remember that you do not have any taxes withheld from your paychecks as an independent contractor.
You should set aside money throughout the year to handle the tax bill.
What DoorDash Tax Forms Will You Need To File?
To be clear, you don’t file tax forms with DoorDash.
The food delivery company merely sends you the 1099-NEC form so that you can use that on your tax return.
You will file your tax return with the Internal Revenue Service and your state tax organization.
The first thing you need to do is file a Schedule C with your Form 1099-NEC.
This is the form that reports your business income and expenses.
You will also need to file a state tax return (unless you live in a state without state income taxes).
Check with your state’s tax agency for more information on how to do this.
What Write-Offs Can You Deduct as a Dasher?
There are several write-offs that you may be able to claim as a Dasher.
You can deduct the cost of supplies you purchased for delivery and any advertising or marketing expenses.
The IRS also allows you to deduct part of your cell phone bill if you use it for work purposes.
As well, you can deduct a portion of your Internet bill.
The percentage of work-related use for each expense decides the amount of each deduction.
Car Related Write-Offs for DoorDash
You can deduct the business use of your car as a Dasher.
It includes gas, oil changes, repairs, and insurance.
You can either deduct the actual expenses or use the standard mileage deduction.
The standard mileage deduction is currently set at 58.5 cents per mile.
It may be easier to use this method.
Calculate both ways to see which gives you a more significant deduction.
How Much of Your Business Expenses To Deduct
You can deduct 100% of your business expenses as a Dasher.
These deductions include any car-related costs, supplies, advertising, and marketing.
However, there are some limits on the amount you can deduct.
You cannot deduct more than your income from DoorDash.
Make sure to ask your accountant for these specifics.
When Do You Have to File DoorDash Taxes?
You will file your tax return by April 15th of the following year.
However, if you need more time, you can file an extension.
The extension gives you until October 15th to file.
Wrapping Up
Don’t become overwhelmed with the Payable DoorDash relationship ending.
Follow the above steps to get your Stripe account in place.
Then, consider working with an accountant or tax preparer to ensure you’re filing correctly.
