Confused about IRS letter after trying to pay Doordash taxes online for 2021 - what do I do next?
So I started doing Doordash as a side gig back in 2021 and made around $9,800 that year. I didn't really understand the whole tax situation for independent contractors at the time and totally forgot about it until earlier this year when I was organizing my finances. I went directly to the IRS website to try and pay what I figured I owed for that 2021 Doordash income. I remember I chose the direct payment option and entered all my information, but I wasn't really sure if I was doing it right because the website kept timing out. Anyway, I just got this letter in the mail from the IRS about my 2021 taxes and now I'm super confused. It mentions something about Schedule C and self-employment tax that I didn't calculate? The letter says I might owe additional taxes plus some penalties for late payment. I honestly have no idea if what I already paid online even went through, or if this letter is completely unrelated to my payment attempt. Should I call the IRS? Try to file an amended return? I've never dealt with 1099 income before and I'm worried I'm going to make things worse if I respond incorrectly. Has anyone dealt with something similar for their gig work? Really need some guidance here!
18 comments
Join the conversation
Mason Kaczka
You need to file a complete tax return for 2021 that includes your Doordash income, not just make a payment. The IRS doesn't know what you're paying for without a proper return. For gig work like Doordash, you should have received a 1099-NEC (or possibly 1099-K) form showing your earnings. You need to report this on Schedule C as self-employment income, where you can also deduct business expenses like mileage. Then you'll calculate self-employment tax on Schedule SE, which covers your Social Security and Medicare contributions. The letter you received is likely a CP2000 or similar notice indicating the IRS received information about income you earned but didn't report on a tax return. The IRS systems matched the 1099 Doordash submitted with your tax records and found the discrepancy.
0 coins
Olivia Van-Cleve
•Ohhh that explains a lot. I didn't actually file a return that included the Doordash income, I just tried to send money. So I need to file a full 2021 return now? Even though it's 2025? Also, what kind of penalties am I looking at here? I'm really worried about how much this might cost me now with all the late fees.
0 coins
Mason Kaczka
•Yes, you need to file a complete 2021 tax return even though it's 2025. The IRS generally allows you to file returns and claim refunds for up to three years, and they can assess taxes for even longer periods. For penalties, you're likely facing three types: failure-to-file (up to 25% of taxes owed), failure-to-pay (0.5% per month, up to 25%), and interest on the unpaid amount. The good news is you can request a payment plan if needed, and you might qualify for penalty abatement if this is your first time having tax issues. File the correct return ASAP to stop additional penalties from accruing.
0 coins
Sophia Russo
I had a similar situation last year with my Uber earnings and was pulling my hair out trying to figure out all the forms. I ended up using taxr.ai (https://taxr.ai) and it literally saved me hours of frustration. They have this feature where you can upload the IRS letter you received and any 1099 forms, and it tells you exactly what forms you need to file and calculates everything for you. It even explained all the deductions I could take for my car expenses that I had no idea about. For gig work like Doordash, that mileage deduction can be huge - seriously reduced what I owed. Since you're dealing with a past year return, it'll help you figure out the late filing process too. Much easier than trying to decipher the IRS website on your own.
0 coins
Evelyn Xu
•How accurate is it though? I'm always skeptical of tax software handling self-employment stuff correctly. Does it actually understand all the Schedule C deductions you can take for delivery driving?
0 coins
Dominic Green
•Can it help with penalty abatement requests too? That's the part I always find most confusing when dealing with late returns.
0 coins
Sophia Russo
•It's surprisingly accurate with the Schedule C deductions. I was skeptical too, but it asked me detailed questions about my mileage, cell phone usage for the app, insulated bags, and even partial car insurance that I didn't know I could partially deduct. It categorizes everything properly on the Schedule C form. Yes, it actually does help with penalty abatement requests! That was one of the most helpful features for me. It has templates for reasonable cause letters and walks you through what qualifies as a valid reason for late filing. It even helps you figure out if you qualify for first-time penalty abatement, which many people don't know about.
0 coins
Evelyn Xu
I was in your exact situation last year and was really worried about the penalties. After reading about taxr.ai in this forum, I decided to give it a try since I had no idea how to handle my late DoorDash taxes. Best decision ever! The system walked me through everything - uploaded my 1099, showed me exactly what I missed on my original filing, and calculated all the business expenses I didn't know I could claim. Turns out I could deduct way more mileage than I thought, plus part of my phone bill and those hot bags I bought. After filing the corrected return using their guidance, I ended up owing much less than what the IRS initially claimed in their letter. They even helped me draft a reasonable cause letter that got about half my penalties waived! The whole process took like an hour instead of the days I was spending trying to figure it out myself.
0 coins
Hannah Flores
If you need to actually talk to someone at the IRS about this letter (which I recommend), good luck getting through on their phone lines. I spent literal WEEKS trying to reach someone about a similar issue. Finally found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes when I'd been trying for days. They have this system that navigates all the IRS phone menus and holds in line for you, then calls you when an agent is about to pick up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c For complicated stuff like back taxes and penalties, sometimes you really need to talk to a human at the IRS who can look at your specific account and explain exactly what's happening. They can tell you precisely what you need to file and can even set up payment plans right on the call.
0 coins
Kayla Jacobson
•How does that even work? Sounds kinda sketchy tbh. Like how do they get you to the front of the IRS phone line when nobody else can get through?
0 coins
William Rivera
•Yeah right. Nothing gets you through to the IRS faster. I've tried everything and still waited hours. This sounds like a scam to get desperate people's money.
0 coins
Hannah Flores
•It's not about getting to the front of the line - they use technology that automatically navigates through all the IRS phone prompts and then waits on hold so you don't have to. Their system basically holds your place in the queue and then calls you right when an agent is about to pick up. It's just saving you from having to sit through the hold music for hours. I was super skeptical too, but it actually works. They don't have any special access to the IRS - they're just handling the frustrating hold time part. I was desperate after trying for days to get through about my tax issue, and this actually connected me to someone who resolved my problem in one call. There's a reason tax professionals use services like this all the time.
0 coins
William Rivera
I can't believe I'm saying this, but I tried the Claimyr thing after posting my skeptical comment, and it actually worked. I was 100% sure it was going to be a waste of money since NOTHING has ever helped me get through to the IRS before. Got connected to an agent in about 45 minutes (which is still a wait but beats my previous record of 3+ hours only to get disconnected). The agent went through my account, explained exactly which forms I needed to file for my missing 1099 income, and set up a payment plan for me right on the spot. They even explained which penalties I could request to have removed through first-time abatement. I hate admitting when I'm wrong but... this saved me a ton of stress. Just had to come back and correct my earlier comment. If you need to talk to someone about that IRS letter, this is way better than the endless redial method I was using before.
0 coins
Grace Lee
Don't forget to claim all your mileage from doing Doordash! I did delivery apps in 2021 too and the standard mileage deduction was 56 cents per mile. That adds up FAST and can reduce your taxable income significantly. Make sure you go back and estimate your mileage as accurately as possible - total miles driven for deliveries, not just from restaurant to customer but also getting to the restaurant. If you drove 100 miles a week for Doordash, that's about $2,912 in deductions for the year!
0 coins
Olivia Van-Cleve
•Wait really? The mileage deduction is that much? I never tracked my miles but I was doing Doordash like 4 nights a week for about 8 months. How would I even calculate that now after so much time has passed?
0 coins
Grace Lee
•You can create a reasonable estimate based on your delivery history. Most delivery apps keep a record of your deliveries - try to get that data from Doordash if you can. If that's not possible, make a good faith estimate. Calculate your average deliveries per shift, estimate miles per delivery (including driving to pickup locations), and multiply by your working days. Document how you arrived at this estimate in case of questions. For 4 nights a week for 8 months, you're looking at roughly 128 working days. Even at a conservative 30 miles per shift, that's 3,840 miles or about $2,150 in deductions! Just be honest but thorough - this could significantly reduce what you owe.
0 coins
Mia Roberts
Make sure you also check if you need to file a state tax return for that Doordash income! The IRS notice is just for federal taxes, but most states will also want their cut and have separate filing requirements.
0 coins
The Boss
•Good point about state taxes. One thing to add - some cities also have local income taxes that apply to self-employment income. I found out the hard way after getting a notice from my city tax department a year after dealing with the IRS!
0 coins