As an Amazon Flex driver, it’s your responsibility to report your income and pay taxes.
It might seem confusing to figure out what you need to do to comply with the law.
Don’t worry, we’re here to help.
In this article, we will provide you with all the information you need to know about Amazon Flex taxes.
We’ll give you a rundown of the documents you’ll need to provide to the IRS, as well as some helpful checklists and tips.
Table Of Contents
Do You Have To Pay Taxes on All Amazon Flex Income?
The answer to this question is yes.
You must report and pay taxes on all the income you earned working your Amazon Flex schedule.
You need to report any Amazon Fresh income as well.
Your tax reporting responsibility includes earnings that you received each time a customer left you a tip.
However, there are some expenses that you can deduct from your taxes.
We’ll go over those below.
What Taxes Do You Have To Pay as an Amazon Flex Driver?
You’re classified as an independent contractor when fulfilling block time as an Amazon Flex driver.
Food delivery contractors must pay various types of both federal and state taxes on any income generated.
Self-employment tax is a combination of Social Security and Medicare tax.
As a self-employed individual, you must pay this tax if your net earnings from Amazon Flex are $400 or more.
The current self-employment tax rate is 15.30%.
The other federal tax that you’ll need to pay is income tax.
It’s a progressive tax, which means that the amount of tax you’ll owe depends on your income bracket.
For example, if you’re in the 24% tax bracket and earn $50,000 from Amazon Flex, you’ll owe $12,000 in federal income taxes ($50,000 x 0.24).
In addition to the federal taxes that we just discussed, you’ll also need to pay state taxes.
The amount of state taxes you’ll owe depends on the state that you live in.
Some states have no income tax.
Others use a flat rate or a progressive rate similar to the federal income tax.
Check with your state’s tax agency to find out what rate you’ll need to pay.
What Tax Forms Do You Get From Amazon Flex?
Various tax forms exist that Amazon Flex drivers must use when filing a tax return.
Let’s review those documents so you can provide the IRS with what it requires.
Amazon will provide you with a Form 1099-NEC.
It’s the document that you’ll use to report your Amazon Flex income on your tax return.
You should receive your Form 1099-NEC in the mail by January 31st.
If you don’t receive it, you can contact Amazon, and they’ll send you a copy.
You may also need the following tax forms when working for Amazon Flex.
- Schedule C form – where you’ll report all business expenses. You’ll need this form if you plan on deducting any business expense from your taxes.
- Schedule SE form – calculates the self-employment tax that you owe.
How to File Amazon Flex Taxes
Now that we’ve gone over the basics of Amazon Flex taxes, let’s take a look at how to file your taxes.
Find the Right Tax Forms
The first step is to gather all the necessary documents.
In addition to your 1099 Form and Schedule(s), you’ll need any other forms or documents required by the IRS and your state.
Do you work as an employee somewhere in addition to working as an Amazon Flex delivery driver? If so, you’ll also need a W-2 form.
A W-2 form is a document your employer sends you that reports your annual wages.
It also states the amount of taxes withheld from your paycheck throughout the year.
The next step is to determine your tax filing status.
Are you single, married, or head of household?
The answer to this question will determine which tax bracket you fall into.
Your tax bracket dictates how much you’ll ultimately owe in taxes.
Find Tax Write-offs
It’s time to determine your deductions.
Your deductions lower the amount of taxes that you owe.
There are two types of deductions: standard and itemized.
A standard deduction is a set amount that you’re allowed to deduct from your taxable income.
This varies from year to year based on inflation.
If you itemize your deductions, you can deduct a wider range of expenses.
Some of the most common deductible expenses include charitable donations, medical and dental expenses, and home office expenses.
The types of tax write-offs that you’ll deduct as an Amazon Flex driver include your vehicle expenses.
You can deduct the business-use portion of your vehicle’s gas, oil, repairs, tires, insurance, and depreciation.
You can also deduct any business-related expenses that you paid for out-of-pocket.
These deductions might include things like a smartphone, printer, scanner, or other office supplies.
Other potential deductions include the cost of a home office, membership dues, and professional services.
Fill out your Schedule C form to report each business-related expense that you incurred while working for Amazon Flex.
Keep track of all your receipts throughout the year so you can accurately report expenses during tax season.
Using a mileage tracker app is one way to keep track of your expenses.
A mileage tracker app logs the miles you drive for business purposes.
You can also use it to track your vehicle’s gas and maintenance expenses.
If you don’t want to use an app, then you can log your mileage and expenses in a spreadsheet.
Another way to keep track of your business-related expenses is to use a business credit card.
A card can help keep all your expenses in one place.
It helps to ensure that you keep an accurate record of what you spent and when.
Get Help From a Tax Professional
Filing taxes as a self-employed Amazon Flex driver might feel overwhelming.
If you have any questions, it’s best to seek out the help of a tax professional.
A tax preparer or accountant can help make sure that you file your taxes correctly.
They may also help to avoid paying penalties.
Deciding to use a tax professional helps if you plan on itemizing your deductions.
Itemizing can turn into a complicated situation.
A tax professional will show you how to take all the deductions you’re entitled to.
Make Tax Payments
The final step is to make any tax payments that you owe.
The IRS offers a few different payment options.
You can pay by check or money order, electronically, or through a debit or credit card.
If you’re expecting a refund, then you don’t have to make a payment.
The IRS will send you a check for the amount of your refund.
It’s possible to end up with a hefty tax bill if you didn’t hold back a portion of your Amazon Flex payments throughout the year.
Avoid the same thing happening next year by making quarterly tax payments.
You can make your estimated quarterly tax payments online, by phone, or by mail.
You need to make estimated tax payments on the following dates.
- April 15
- June 15
- September 15
- January 15 of the following year
If you don’t pay your taxes on time, then you’ll most likely pay a late payment penalty.
You can also incur interest on the unpaid tax amount.
If you can’t pay your taxes in full, contact the IRS to discuss your payment options.
They might set up a payment plan for you.
Services To Use for Amazon Flex Taxes
When filing on your own, you can avoid costly mistakes by using tax software.
Here are three quality tax programs you can find inside the Amazon Flex app.
Similar to HR Block, Turbo Tax is one of the most popular do-it-yourself tax software programs.
They offer a comprehensive solution for filing your federal and state taxes.
You can use it to file your Schedule C, estimate your quarterly taxes, and get help from a tax professional if needed.
QuickBooks Self-Employed is an accounting software program specifically for self-employed individuals.
In addition to helping you file your taxes, it can help you track your expenses and mileage throughout the year.
This option can make tax time a lot easier since you’ll already have all your information organized.
Tax Slayer is another popular tax software program.
They offer a simple and easy-to-use interface.
The company also provides a team of tax professionals to answer any questions you might have.
We know that taxes can become confusing and complicated.
We hope that this information provides you with some clarity on the subject of Amazon Flex taxes.
Follow all the outlined steps. Take proactive action to ensure that you’re paying the correct amount of tax on your return.