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.
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.
Your Social Security taxes help you earn Social Security quarters that qualify you for retirement benefits.
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 Return||Based on Prior Year Tax Return|
|AGI up to $150,000 ($75,000 if married filing separate)||90% of current year taxes||100% of prior year taxes|
|AGI over $150,000 ($75,000 if married filing separate)||100% of current year taxes||110% 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.
*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.