Amazon Flex Taxes: How to File and Find Deductions

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If you drive for Amazon Flex, you’re responsible for setting aside and reporting your own taxes. It’s easy to do if you take the time to learn the basics. Here’s how Amazon Flex taxes work for drivers and what you can do to pay less when you file taxes for the first time and in future years.

Are Amazon Flex delivery drivers employees, or does it count as self-employment?

Amazon Flex drivers are independent contractors. That means you have to pay self-employment tax. This includes Social Security and Medicare taxes.

Unlike a W-2 employee, Amazon doesn’t pay half of your FICA taxes. Most people pay 15.3% in self-employment tax. If you have more than six figures in total earned income, you may reach the Social Security cap and pay less.

You’ll also pay federal income taxes according to your Adjusted Gross Income and tax bracket as well as state income taxes if your state has an income tax.

What counts as your taxable income from Amazon Flex?

Your taxable income is your business income minus your business expenses. You should report all of your earnings you receive through the Amazon Flex app and any cash tips.

When you file your tax return, report your total income before expenses. There are separate lines to subtract your deductible expenses.

Do Amazon Flex drivers need to make estimated tax payments?

Self-employed workers usually need to make estimated tax payments. Amazon Flex does not take out taxes.

If you don’t have other tax withholding that covers your tax liability, you will need to make quarterly tax payments. If you have a W-2 job and do Amazon Flex for extra money, you can have more taxes withheld at your main job instead of paying quarterly taxes.

Here’s how much you need to pay in estimated taxes:

Based on Current Year Tax ReturnBased on Prior Year Tax Return
AGI up to $150,000 ($75,000 if married filing separate)90% of current year taxes100% of prior year taxes
AGI over $150,000 ($75,000 if married filing separate)100% of current year taxes110% of prior year taxes
To avoid the estimated tax penalty, you must pay one of the above percentages through a combination of estimated tax payments and withholding. Typically, you need to make four equal payments. If you have uneven income, you can use the annualized income installment method.

If this is your first year self-employed, most Amazon Flex drivers are safe setting aside 25% to 30% of their pay. After your first year, you can pay based on your previous year’s taxes.

If your income starts going up, you’ll typically want to set aside 30% of the additional income. If you pay estimated taxes based on the previous year, don’t forget you’ll owe more taxes at tax time.

You can also use an online tax calculator or software like QuickBooks Self-Employed to get a more precise estimate as you go.

Here’s when your estimated tax payments are due:

Action Needed2022 Tax Year2023 Tax Year
First Quarter Estimated Tax Payment DueApril 18, 2022April 18, 2023
Second Quarter Estimated Tax Payment DueJune 15, 2022June 15, 2023
Third Quarter Estimated Tax Payment DueSeptember 15, 2022September 15, 2023
Fourth Quarter Estimated Tax Payment DueJanuary 17, 2023*January 16, 2024*
Receive Your 1099No later than January 31, 2023No later than January 31, 2024
File Your Tax ReturnTuesday April 18, 2023 (15th is a Saturday; Monday is Washington, D.C., Emancipation Day)April 15, 2024
Extended Filing DeadlineMonday October 16, 2023 (15th is a Sunday)October 15, 2024
*You can skip the final estimated tax payment if you file your tax return and pay your full balance due by February 1st.

How do you get your Amazon Flex 1099 tax form?

You can find your Form 1099-NEC in Amazon Tax Central. Internal Revenue Service regulations your Amazon Flex 1099 form download to be available by January 31st.

NEC stands for nonemployee compensation. This is a newer form that’s now used in place of the old Form 1099-MISC. It does the same thing and doesn’t change your taxes.

If you don’t want to wait for your Amazon flex tax forms, you have two options. The first option is to enter your income in your tax software as income you didn’t receive a 1099 for. This won’t change your income or your taxes owed.

Your tax software doesn’t actually attach your Form 1099 to your tax return. It just uses your 1099s to calculate your total income.

If you want to enter your income as a 1099, you can select to add a 1099 with the following information:

  • Use the total earnings in your Amazon Flex App for the previous calendar year (January 1st to December 31st)
  • Amazon Flex EIN: 91-1646860
  • Amazon Flex Legal Business Name: Amazon Com Inc
  • Amazon Flex Business Phone: 206-266-1000
  • Amazon Flex Business Address: 410 Terry Avenue North, Seattle, WA, 98109 

What happens if you made less than $600?

If you made less than $600, you usually won’t get a 1099 for Amazon Flex income. $600 is the IRS minimum, and it costs Amazon money to send tax forms.

This doesn’t mean you don’t have to pay taxes or file taxes, though. You have to file a tax return if you have at least $400 in self-employment income. If you made less than $400, you may still have to report your Amazon Flex driver earnings if you have other income that makes you have to file a tax return.

If you need to file taxes and didn’t make enough to get a 1099, you can find your total earnings for the year in your driver account. You can also use your bank statements or accounting software.

What forms do you file with your tax return?

The main tax form you need to file is Schedule C. This is where you enter your delivery income and business deductions. Schedule C is part of a Form 1040 individual tax return.

Your tax software will also automatically fill out some extra forms like Schedule SE. Schedule SE is for calculating your self-employment tax.

What tax deductions can you take on your Schedule C?

The IRS rules say that you can deduct ordinary and necessary business expenses.

Can Amazon Flex drivers deduct mileage?

The biggest deduction when you drive for a delivery service is car expenses. You can either track and deduct your actual car expenses or use the standard mileage rate.

The standard mileage deduction requires you to track all your expenses like gas, insurance, and car maintenance. You’ll also need to save receipts. With the standard mileage rate, you just need to track your miles.

Here are the current mileage rates:

  • 2022 (Miles for July through December): 62.5 cents per mile
  • 2022 (Miles for January through June): 58.5 cents per mile
  • 2021: 56 cents per mile
  • 2020: 57.5 cents per mile

In addition to being easier to use the standard mileage rate, most people end up with a bigger deduction. You can learn more about the standard mileage rate versus actual expenses method here.

What’s the best mileage tracker?

There are many mileage tracking apps you can download on your mobile phone. Assuming you have your cell phone in your car, they automatically detect when you’re driving. You just need to open the app and mark which trips were business mileage and which trips were personal.

I like to use QuickBooks Self-Employed. It’s an accounting app for independent contractors that makes it easy to automatically track all of your income and expenses.

Can you deduct the money you spend on your phone and car insurance?

You can’t deduct your phone bills unless you can prove to the IRS how much you used your phone for personal use versus business use.

Car insurance is covered by the standard mileage deduction. If you use the actual expense method, you need to split your insurance costs into business and personal. You usually do this by dividing your business miles by the total number of miles you drove during the year.

See also: What Tax Deductions Can a Courier Driver Take?

Related: Your personal car insurance may not cover you while you’re working. Check to see if you need a special endorsement for gig work or a commercial auto insurance policy.

Do Amazon Flex drivers qualify for the Qualified Business Income Deduction?

Most drivers will qualify for the QBI deduction and get an additional 20% deduction on their taxable income.

How can Amazon Flex drivers save for retirement?

Your Amazon Flex profits are earned income that allows you to make Traditional or Roth IRA contributions.

If you want to save more than $6,000 per year in your retirement accounts or are above the income limits for a personal IRA, look at a SEP IRA or Solo 401(k).

Can Amazon Flex drivers deduct health insurance?

Since there’s no Amazon Flex health insurance, you may be able to deduct the cost of your health insurance if you’re not eligible for coverage through another employer or your spouse’s employer.

Your health insurance premiums don’t go on your Schedule C. Instead, your tax software will ask you about health insurance separately.

Depending on your income, you may be eligible for a subsidized health insurance plan through the Healthcare market place. If you receive a subsidy, you can only deduct the portion of the premiums that you pay.

Does Amazon Flex pay for fuel?

Amazon Flex doesn’t directly pay for your fuel expenses.

Instead, of Amazon reimbursing you for gas, it’s part of your total pay, and you claim your gas expenses or miles with your deductions.

This can actually work out in your favor if you have a car with good gas mileage. Anything you don’t spend on gas is more money in your pocket. Some Amazon Flex delivery drivers even use electric or hybrid cars.

How does Amazon Flex compare to other gig jobs?

In terms of taxes, Amazon Flex taxes work similarly to Instacart taxes or Uber taxes. In fact, you’ll typically combine your taxes for your delivery and rideshare taxes onto a single Schedule C since they’re similar work.

While Amazon Flex driver pay is OK, Amazon has a reputation for being willing to have high turnover due to its working conditions. It’s even projected to run out of possible workers to hire by 2024.

Many people are able to find ways to work efficiently and choose when to work to make Amazon Flex profitable for them. You may also want to consider looking for under the table jobs.

Conclusion

It’s easy to file Amazon Flex taxes when you take the time to learn the basics. The most important thing to do is track your mileage and other deductions during the year.

If you stay organized, you can finish your taxes in 15 minutes, because you’re just transferring the information you already have. If you’re not organized and don’t keep proof of your deductions, you might have to pay more in taxes.

Your tax software will guide you through everything you need to do. All of the major programs now support gig jobs like Amazon Flex.

Some people prefer to let a tax professional do their taxes instead. You may not like doing your taxes ever, or you might want to get extra help in your first year. A tax professional can also help make sure you didn’t miss anything and suggest ways to save even more next year.

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