Hi friend! I‘m so glad you‘re here. If you‘re considering becoming an Amazon Flex driver, you probably have questions about how taxes will work. I‘ll walk you through everything in this detailed guide so you can feel confident and prepared on the tax front. Stick with me!
Are Amazon Flex drivers self-employed?
Yes, Amazon classifies Flex drivers as independent contractors. Here‘s what that means:
- You are self-employed, not an Amazon employee
- Amazon does NOT withhold taxes from your earnings
- You are responsible for paying your own income and self-employment taxes
As a contractor, you decide when and where to make deliveries. But you also take on key tax duties an employer usually handles for employees.
Self-Employment Facts
- Over 15 million Americans are self-employed
- The self-employed workforce grew 15% from 2019 to 2020
- Common self-employed jobs: contractors, Uber/Lyft drivers, Etsy sellers
So welcome to the world of self-employment! While it means more tax responsibilities for you, the flexibility of being your own boss is very appealing.
Does Amazon Flex withhold taxes?
No, Amazon Flex does not withhold or remit any taxes on your earnings. Here‘s a quick recap:
-
No income tax withheld – You must calculate and pay income taxes yourself
-
No payroll taxes paid – Social Security, Medicare taxes are not withheld or paid by Amazon
-
You pay self-employment tax – You must pay 15.3% self-employment tax to fund Social Security and Medicare
-
Estimated taxes are on you – Amazon does not make quarterly estimated tax payments for you
-
1099 independent contractor – You‘ll receive a Form 1099-NEC if you earn over $600
As a self-employed Flex driver, you need to make sure you are paying income and self-employment taxes correctly. The responsibility falls fully on your shoulders.
But don‘t worry, I‘ll explain more on how to handle all of this below!
Do I have to file a tax return for Amazon Flex?
Yes, you must file an income tax return if you earn money through Amazon Flex. Here are some key filing rules:
-
If your net self-employment earnings are $400 or more, you must file a federal tax return. This threshold is much lower than for W-2 employees.
-
You must report your Amazon Flex income even if you have no other income for the year.
-
Filing is important even with minimal Flex earnings to calculate taxes correctly and avoid penalties.
-
You will report your Flex income and any business deductions on Schedule C and attach it to your Form 1040.
| Self-Employment Filing Thresholds |
|-|-|
| Net Earnings | Filing Requirement |
| Less than $400 | Not required to file |
| $400-$600 | Optional to file |
| $600 or more | Required to file |
So even if you just drive a few blocks here and there for Flex, be sure to file a tax return! It avoids problems down the road.
Is Amazon Flex a W-2 or 1099?
Amazon will issue you a Form 1099-NEC rather than a W-2 employee wage statement.
-
W-2s are for employees who have taxes withheld
-
1099s are for independent contractors like Flex drivers
Specifically:
-
You‘ll get a 1099-NEC ("non-employee compensation")
-
It reports your total payments from Flex – before expenses
-
If you earn $600+ in a year, Amazon must issue you a 1099
Be sure to track all your Flex payments so you can reconcile your 1099 details when it arrives. I recommend using an app like QuickBooks Self-Employed or Hurdlr.
Sample 1099-NEC
| Payer | Amazon Flex Services |
|---|---|
| Recipient (SSN) | XXX-XX-1234 |
| Nonemployee compensation | $2,500 |
| Date | 1/31/2024 |
Now let‘s talk about…
How much tax will I pay on Amazon Flex income?
Your total tax due will depend on your taxable income from Flex earnings:
Taxable Income = Gross Amazon Payments – Allowable Business Deductions
Common business deductions:
- Vehicle mileage
- Cell phone & data
- Supplies (bags, coolers, water)
- Uniforms/clothing
- Accounting fees
- Insurance
Let‘s say you earn $10,000 from Amazon Flex in 2024. After deducting $4,000 of qualified business expenses, your taxable income would be $6,000.
You would owe:
-
Income tax – Based on your taxable income and filing status. For example, around $900.
-
Self-employment tax – 15.3% for Social Security and Medicare. In this case, $918.
So your total federal tax would be approximately $1,818. You may owe additional state taxes.
Deductions are key to reducing taxes! Be sure to track expenses. I‘ll cover deductions more soon.
Quarterly estimated taxes
As a self-employed Flex driver, you typically need to make quarterly estimated tax payments to avoid penalties. Here‘s how it works:
-
Payments are due 4 times per year: April 15, June 15, September 15, and January 15
-
The IRS Form 1040 ES helps you calculate each payment amount
-
The payments should cover your expected income tax plus self-employment tax
Let‘s say in Q1 2023 you earn $4,000 from Flex after deductions. Here is how to estimate tax due:
-
Income tax – $4,000 x 15% = $600
-
Self-employment tax – $4,000 x 15.3% = $612
-
Total tax = $1,212 x 25% (for Q1) = $303 Q1 payment
Making quarterly payments prevents a big tax bill next April! And you avoid underpayment penalties.
Detailed recordkeeping requirements
As a self-employed Flex driver, you must keep detailed records of income and expenses. Here are some top tips:
-
Track all Amazon payments – save payment details and summaries
-
Maintain a mileage log for each shift – date, purpose, miles
-
Retain all receipts for deductible expenses – gas, supplies, fees, equipment
-
Categorize deductions by type – vehicle, supplies, insurance, etc.
-
Choose an accounting app to easily capture info – QuickBooks, Stride, Hurdlr
-
Take pictures; scan or store paper receipts digitally
-
Keep records for at least 3 years after filing
Solid recordkeeping makes tax filing a breeze! And provides evidence to the IRS if ever needed.
Tax deductions guide
As promised, here is more detail on common business deductions for Flex drivers:
Vehicle deductions
Your biggest deduction will likely be vehicle expenses. You can deduct:
-
Standard mileage cost ($0.625 per mile in 2024) OR
-
Actual vehicle costs like gas, repairs, insurance, etc.
Mileage logs are required. I recommend using a tracking app like Everlance or Stride.
Example for 5,000 miles:
5,000 miles x $0.625 = $3,125 deduction
Cell phone
If you use your personal cell phone for Flex, deduct:
- Monthly service charges
- Data plan costs
- Portion of phone
Sample deduction: $40/month x 12 months = $480
Supplies
Deduct bags, coolers, bottles, blankets, uniforms, or other supplies you need for deliveries.
Example costs: $200 on various supplies
Accounting apps & tax prep
Deduct costs of apps or software you use to track earnings and expenses. Also tax prep fees!
Sample deductions:
Quickbooks = $120/year
TurboTax = $100
Insurance
Deduct any special insurance policies like rideshare insurance that you need for Flex.
Sample premium: $600 annually
Keep detailed records of eligible deductions and stay organized by category. Every little bit helps reduce taxes!
Sample filled-out tax forms
To give you an idea of how to report your Amazon Flex income, here are examples of a Schedule C and Form 1040.
Let‘s say Susan had the following in 2022:
-
Amazon Flex gross earnings: $15,000
-
Mileage deduction: $5,400 (8,640 miles @ $0.625 per mile)
-
Other deductions: $1,235 (supplies, phone, tax prep fees)
Her net business income would be:
$15,000 – $5,400 mileage – $1,235 expenses = $8,365 net income
Here is her Schedule C:
And Form 1040:
As you can see, Susan owed about $1,743 in federal income tax plus $1,278 for self-employment tax.
Tracking deductions lowered her tax bill significantly!
Tax prep tips & options
When it comes time to prepare your tax return, you have a few options as an Amazon Flex contractor:
Self-prepare: Do your own taxes using tax software like TurboTax. Look for "Self-Employed" package. Cost = $90-$180
CPA: Hire a certified accountant. Expect to pay $200-$800+ depending on your situation.
Tax prep firms: Services like LibertyTax, H&R Block. Look for small business expertise. Cost = $150-$500.
For simple driving-only income, DIY software can work great. For more complex returns, a qualified CPA may be helpful.
I recommend trying tax software and seeing if you‘re comfortable with the process. If not, seek professional help next time.
State taxes
In addition to federal taxes, you may owe state income taxes on Amazon Flex earnings:
-
Home state – Generally pay taxes if you live and work in the same state
-
Multiple states – Prorate income based on earnings in each state
-
Reciprocity – Some states have agreements to only pay taxes to primary state
-
Registration – May need business license if driving in multiple states
Track where you drive. If crossing state lines, understand tax rules in each state.
IRS resources
The IRS provides many helpful resources for self-employed Flex drivers:
For tax questions, you can call the IRS helpline at 800-829-1040. Wait times can be long, so review the website first.
Check out this page for the self-employed too. Tons of useful resources!
Getting your 1099 tax form
Accessing your 1099 from Amazon is easy. Just log into your Flex account and:
-
Go to "Tax Information"
-
Select "Tax Central"
-
View/Print Available Tax Forms
Your 1099 should be there by January 31 if you earned over $600 the prior year.
You can also opt for paperless delivery so it‘s emailed instantly.
If you can‘t access the form, contact support. They can send it directly to you.
And that wraps up this complete guide on how taxes work for Amazon Flex drivers! Let‘s recap the key points:
-
You are an independent contractor responsible for your own taxes
-
Track all income and deductible expenses diligently
-
Make quarterly estimated tax payments to avoid penalties
-
File Schedule C and pay self-employment tax
-
Use free IRS resources to understand requirements
Taxes don‘t have to be intimidating as a Flex driver when you plan ahead and stay organized. You‘ve got this! Let me know if any other tax-related questions come up.
