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Will I Get a 1099 from DoorDash? The Definitive Guide for Dashers

Yes, under most circumstances, if you’re a DoorDash driver (or “Dasher” as they call you) in the United States and earned at least $600 during the tax year, you will receive a 1099-NEC form from DoorDash. This form reports your earnings to the IRS, and you’ll need it to accurately file your taxes. Let’s dive into the details and answer all your pressing questions about DoorDash and the 1099 form.

Understanding the 1099-NEC Form

What is a 1099-NEC?

The 1099-NEC (Nonemployee Compensation) form is an IRS document used to report payments made to independent contractors. Before 2020, this information was reported on Form 1099-MISC. If you work as a DoorDash Dasher, you’re considered an independent contractor, not an employee. This is a crucial distinction because it impacts how you pay your taxes. You are responsible for paying self-employment taxes, which includes Social Security and Medicare taxes.

Threshold for Receiving a 1099-NEC

The IRS requires DoorDash to issue a 1099-NEC form to any Dasher who earned $600 or more during the tax year. If you earned less than $600, DoorDash is not obligated to send you a 1099-NEC. However, remember, you are still legally required to report all income you earn, even if you don’t receive a 1099-NEC.

What Information is on the 1099-NEC Form?

Your 1099-NEC form from DoorDash will include the following key information:

Your name, address, and Taxpayer Identification Number (TIN), which is usually your Social Security number (SSN) or Employer Identification Number (EIN) if you operate as a business.
DoorDash’s name, address, and EIN.
The total amount of nonemployee compensation DoorDash paid you during the tax year, reported in Box 1.

Receiving Your 1099-NEC from DoorDash

How Will I Receive My 1099-NEC?

DoorDash typically provides your 1099-NEC electronically through the Dasher app or website. You’ll likely receive an email notification when it’s available. Make sure your contact information is up-to-date in the app to avoid any delays. In some cases, DoorDash may mail you a physical copy of the form, but electronic delivery is becoming the norm.

When Will I Receive My 1099-NEC?

DoorDash is required to make your 1099-NEC available by January 31st of the following year. If you haven’t received it by then, check your Dasher account online or contact DoorDash support.

What if My Information on the 1099-NEC is Incorrect?

It’s crucial to verify that all the information on your 1099-NEC is accurate, especially your Social Security number (SSN). If you find any errors, contact DoorDash support immediately to request a corrected form (Form 1099-NECc). Using an incorrect form can cause delays in processing your tax return and could potentially trigger an audit.

Tax Implications for DoorDash Dashers

Understanding Self-Employment Taxes

As an independent contractor, you are responsible for paying self-employment taxes. This includes both Social Security and Medicare taxes. Unlike employees who have these taxes withheld from their paychecks, Dashers must calculate and pay these taxes themselves. The self-employment tax rate is generally 15.3% (12.4% for Social Security and 2.9% for Medicare) on 92.35% of your net self-employment income.

Deducting Business Expenses to Reduce Your Taxable Income

One of the biggest advantages of being an independent contractor is the ability to deduct business expenses from your gross income. This can significantly reduce your taxable income and the amount of self-employment taxes you owe. Common deductible expenses for Dashers include:

Mileage: The standard mileage rate set by the IRS. Keep detailed records of your mileage using a mileage tracking app.
Vehicle expenses: Alternatively, you can deduct actual expenses like gas, oil changes, repairs, and insurance.
Phone expenses: A portion of your phone bill related to your DoorDash business.
Hot bags and insulated containers: Used to keep food at the correct temperature.
Parking fees and tolls: Incurred while delivering.
Health insurance premiums: If you are self-employed, you may be able to deduct the amount you paid in health insurance premiums.

Important Note: It’s essential to keep accurate records of all your income and expenses to properly claim deductions.

Quarterly Estimated Tax Payments

Because taxes are not withheld from your DoorDash earnings, you may be required to make quarterly estimated tax payments to the IRS. This helps you avoid penalties for underpayment of taxes. The IRS provides Form 1040-ES for calculating and paying estimated taxes. Generally, if you expect to owe $1,000 or more in taxes, you should make estimated tax payments.

Utilizing Tax Software and Consulting with a Tax Professional

Filing taxes as a DoorDash driver can be complex. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional. They can help you navigate the tax laws, identify all eligible deductions, and ensure you are filing your taxes correctly.

Frequently Asked Questions (FAQs) about DoorDash and 1099-NEC

Here are some frequently asked questions to provide further clarity on the 1099-NEC form for DoorDash drivers:

What if I dashed for DoorDash in multiple states? You will likely receive one 1099-NEC from DoorDash that consolidates all your earnings, regardless of the states you worked in. However, it’s crucial to ensure all income is reported correctly and that you understand the state-specific tax implications of your earnings.
What happens if I didn’t receive a 1099-NEC, but I earned over $600? You are still responsible for reporting all income you earned, even if you don’t receive a 1099-NEC. Contact DoorDash support to request a copy of your earnings summary. If they don’t provide it, you should still report your income based on your own records.
Can I deduct expenses even if I don’t itemize deductions on Schedule A? Absolutely! Business expenses for independent contractors are deducted on Schedule C (Profit or Loss From Business) of Form 1040. These are separate from itemized deductions on Schedule A.
How does the mileage deduction work exactly? You can deduct the standard mileage rate set by the IRS for each mile you drive for business purposes, or you can deduct the actual expenses of operating your vehicle. You must choose one method and stick with it. Keeping a detailed mileage log is crucial.
What’s the difference between the standard mileage rate and deducting actual vehicle expenses? The standard mileage rate is a simplified method where you multiply your business miles by a set rate. Deducting actual expenses involves tracking and deducting the actual costs of operating your vehicle, such as gas, oil, repairs, insurance, and depreciation. The method chosen should be the one that results in the largest deduction, with careful accounting.
What if I only Dashed for a few weeks and didn’t earn much? If you earned less than $600, you likely won’t receive a 1099-NEC. However, you still need to report the income on your tax return. You may be able to deduct any related business expenses.
Are there any apps to help me track my mileage and expenses? Yes, there are several mileage tracking apps and expense trackers specifically designed for independent contractors. Popular options include Stride, Everlance, and MileIQ. These apps can automatically track your mileage and help you categorize your expenses.
If I’m using my car for both personal and business use, how do I calculate the deductible portion of vehicle expenses? You can only deduct the portion of your vehicle expenses that are directly related to your DoorDash business. For example, if 60% of your total mileage for the year was for DoorDash, you can deduct 60% of your vehicle expenses.
Can I deduct the cost of snacks and drinks I buy while Dashing? Generally, you cannot deduct the cost of snacks and drinks for yourself. These are considered personal expenses. However, you may be able to deduct the cost of snacks and drinks provided to customers as a business expense.
What are the penalties for not filing taxes or underreporting income? The penalties for not filing taxes or underreporting income can be significant. They can include fines and interest on the unpaid taxes. In severe cases, you could even face criminal charges. It’s always best to file your taxes accurately and on time.
How long should I keep my tax records? The IRS generally recommends keeping your tax records for at least three years from the date you filed your return or two years from the date you paid the tax, whichever is later. However, it’s often a good idea to keep records for longer, especially if you anticipate any potential audits.
Where can I find more information about taxes for independent contractors? The IRS website (irs.gov) is an excellent resource for information on taxes for independent contractors. You can also consult with a qualified tax professional or use tax software designed for self-employed individuals.