Your Guide to Taxes for Amazon Flex Delivery Drivers

by
Christian Davis
Updated 
May 11, 2022
February 16, 2022
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Reviewed by
Sarah York, EA

As long as you have a car and a smartphone, delivering packages through Amazon Flex is a great way to make some extra cash. At tax time, though, your life can get pretty complicated.

This article will teach you all the tips and tricks you need to get your Amazon Flex taxes right. We'll even show you all the tax deductions you can take to bring your tax bill down as much as possible.

Contents

The taxes you have to pay as an Amazon Flex driver

If you drive for Amazon Flex, you're classified as an independent contractor — not an Amazon employee. Like rideshare drivers, real estate agents, and even small business owners, you belong to a growing part of the US labor force: people who want to set their own hours and be their own boss.

Independent contract work means a lot of freedom on the job, but things can get tricky when finances come into play. For one thing, Amazon won't take care of withholding for you. As far as taxes go, you're on your own — which comes with some major headaches and some perks.

We'll get to the good part later. (Hint: It involves tax write-offs!) But for now, let's talk about the not-so-fun stuff: all the taxes you'll have to pay. These fall into two major categories: self-employment taxes and income taxes.

Self-employment taxes

There are two parts to self-employment tax: Medicare taxes and Social Security taxes. 

W-2 employees pay these too. But their employers give them a hand here, matching all of their tax payments. But you're legally considered both the employee and the employer here. That makes you responsible for paying both shares of tax. 

When people talk about "self-employment tax," they're referring to this doubled payment of Medicare and Social Security taxes. They come to 15.3% for you, compared to the 7.65% paid by traditional employees. 

If this is your first year as a Flex driver, that 15.3% can land you with a tax bill much heavier than you're used to seeing. To make sure you're prepped for it, try using a self-employment tax calculator so you know how much to save up. 

Income taxes

On top of your self-employment tax, you still have to file your own federal and state income taxes.

The amount of federal income tax you'll pay depends on which tax bracket you fall in. State income taxes, meanwhile, vary widely depending on where you live. (Some states, like Alaska and Florida, don't collect any at all!)

All this can be a lot to keep track of. To simplify things, try filing your taxes through Keeper Tax. Our tax filing app shows you the exact forms you'll need as a self-employed worker, no matter where you're based.  And it never costs extra to file in more states.

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How to file your Amazon Flex taxes

Once you understand what exactly you're paying, it's time to move onto the next step: figuring out how to file your self-employment taxes.

That means making sure you've got the right forms.

1. Get your 1099-NEC from Amazon Flex

Form 1099-NEC reports the annual income you earned from an independent contracting gig —   like driving for Amazon. (The NEC stands for "nonemployee compensation," and it distinguishes this form from other types of 1099s, all of which are used to report various kinds of income.)

The 1099-NEC is the independent contractor's equivalent to form W-2, which traditional employees get every year. Both types of forms report your annual earnings. They're also sent out to the IRS.

❓Who gets a 1099-NEC from Amazon Flex

As long as you made more than $600 on Amazon Flex in the previous year, you should expect a 1099-NEC by January 31. 

❓How to find your Amazon Flex 1099 form

Amazon Flex drivers can download a digital copy of their 1099-NEC from taxcentral.amazon.com.

❓What to do if you don't get a 1099 from Amazon

Not all drivers are supposed to get a 1099-NEC. If you earned less than $600 in Amazon Flex income — say, if you started driving late in the year — the company isn't required to send you a form at all.

Unfortunately, you'll still have to report your income to the IRS, even without a 1099. To make sure you do this right, just look through your bank statements and add up your direct deposits from Amazon Flex.

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2. Fill out your Schedule C

Your 1099-NEC isn't the only tax form you'll use to file. There's also Schedule C, which shows "Profit and Loss From Business." 

💸 Deducting your expenses on Schedule C

Schedule C is the form you use to deduct your business expenses from your gross income.

Unlike the 1099-NEC, which you receive, already completed, from Amazon, you'll fill out Schedule C. But the extra work is worth it, since it'll help you save on your taxes.

Let's backtrack a bit. Remember when we mentioned that gig work has both pros and cons when it comes to taxes? We've spent a lot of time talking about the downsides. Now, we finally get to dig into the good news: you don't get taxed all your Amazon Flex earnings.

You should only ever pay taxes on your net business income — the amount you have left after subtracting all your expenses.

We'll talk more later about these expenses in a bit. For now, hang tight as we go through the other forms you need to file.

3. Complete your Schedule SE

In addition to your Schedule C, you'll have to fill out a Schedule SE, for "self-employment".

This form is used to calculate the amount of self-employment tax you owe.

3. Attach both forms to your 1040

Once you've filled out both your Schedule C and Schedule SE, you'll attach it to Form 1040, which all taxpayers submit with their tax returns.

The expenses Flex drivers can deduct

Filling out your tax forms correctly helps the IRS and prevents you from getting into trouble. But it should also help you.

How? Putting all your business expenses into Schedule C helps lower the amount of income you can be taxed on.

You should be writing off everything you bought for work over the course of the tax year. Otherwise, you're actually overpaying the IRS.

Take a look at some common write-offs you can claim.

Car expenses for Amazon Flex drivers

As a Flex driver, you have no way around using your own vehicle for work. If you drive full time, you're probably racking up a lot in car expenses every month. Even if Amazon Flex is a side hustle, your gas expenses will add up.

Luckily, you can write off part of everything you spend on your car, including:

  • ⛽ Gas
  • 🛢️ Oil
  • 🛡️ Car insurance
  • 🔧 Repairs
  • 💰 Vehicle lease payments
  • 🏷️ Car depreciation 
  • 🅿️ Parking
  • 🛂 Tolls
  • 📋 Vehicle registration

🚗 How to deduct your car expenses

You actually have two options for deducting car expenses from your taxes.

You can deduct a flat rate for all the miles you drive for work. In this case, that means miles logged between drop-off locations — driving between the Amazon warehouse and your house doesn't count. (To learn more about mileage rules, check out our guide to business mileage vs. commuting mileage. Only the former is tax-deductible!)

Alternatively, you can simply write-off a percentage of everything you spend on your car. (This percentage is based on how much you use your car for business use, as opposed to personal use.)

If you want to learn more, we've got a whole post on how the standard mileage deduction compares to actual car expenses. But in a nutshell, tracking actual expenses tends to be easier.

If you use Keeper Tax, keeping up with your car expenses is basically effortless. In addition to filing your taxes, the app automatically scans your bank accounts and credit cards for write-offs throughout the year.

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That way, you don't have to keep complicated records by hand — or break out a mileage tracker.

More write-offs for Amazon Flex drivers

Gas isn't the only thing you'll need to pay for if you want to make it as a delivery driver. Could you imagine doing your job without a cell phone, for example? 

Exactly. That's why it's a write-off too.

We've got a whole roundup of Amazon Flex write-offs you can take to save extra money on your taxes. Here are some of the most important ones:

  • 📶 Your mobile phone and phone bill
  • 🛒 A dolly
  • 🎒 Courier bags
  • 🦺 High visibility gear for early morning deliveries

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When to file your Amazon Flex taxes

Once you've figured out all the write-offs you can take, you should see your taxable income start to shrink. Now you just need to figure out when to pay your newly lowered tax bill: once a year, or once a quarterly?

Why aren't your taxes just due in April, exactly? Once again, it's because you're self-employed. 

Unlike a W-2 employee, your taxes aren't withheld automatically — meaning the IRS doesn't receive them in a steady drip throughout the year.

To make sure they're still getting paid at regular intervals, the IRS asks you to make estimated tax payments, a requirement that kicks in as long as you expect to owe them more than $1,000. These payment are due on the following days:

  • 🌷 April 15th
  • 🏖️ June 15th
  • 🍁 September 15th
  • 🌲 January 15th

It can be a pain to budget out how much you should pay each quarter. But you don't have to figure it out by yourself. The easiest way to plan for your quarterly payments is to use Keeper Tax's estimated tax calculator. (It'll even tell you if your delivery income is low enough to get away with not paying quarterly.)

Remember, the IRS is pretty rigid about their deadlines. If you miss a deadline by a single day, penalties begin to rack up. These start at 0.5% of what you originally owed and can go all the way up to 25%.

Gig worker taxes have their share of quirks. But now, you're ready to deal with them all —and avoid expensive mistakes in the process. From how much money you owe to all the write-offs you can save on, you're in good shape to get your Amazon Flex taxes right this year.

Christian Davis

Christian Davis

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Christian is a copywriter from Portland, Oregon that specializes in financial writing. He has published books, and loves to help independent contractors save money on their taxes.

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