Amazon Flex allows you to use your vehicle to deliver orders on behalf of Amazon. This is a fantastic, profitable side gig, especially if you like driving.
But how does your money get taxed? Does Amazon Flex take out taxes, or do you have to file them yourself?
Does Amazon Flex Take Out Taxes?
Amazon Flex does not take out or withhold taxes. Because Amazon treats her Amazon Flex drivers as independent and self-employed contractors, you’ll be issued a Form 1099-NEC each year. Therefore, as an Amazon Flex driver, you’re responsible for calculating, reporting, and paying your taxes following IRS regulations.
When it comes to taxes, you want to know what to do so you don’t get into trouble with the IRS. Read on to find out all you need to know about how your income as a Flex driver will be taxed.
Is Amazon Flex Considered Self-Employed?
Yes, Amazon Flex drivers are considered to be self-employed, and this is because you work on your terms as an Amazon Flex driver.
You use your vehicle to make deliveries on behalf of Amazon, set your availability times, and select which deliveries you would like to attend to. You’re your boss using the Amazon Flex platform to interact with your clients.
Like other self-employment models, Amazon Flex pays Flex drivers all their earnings in full! So, it’s your responsibility to calculate, report, and pay taxes to the IRS.
Does Amazon Flex Report to IRS?
Amazon Flex does not report to the IRS because Amazon Flex regards Flex delivery drivers as independent contractors.
Amazon Flex sends out a 1099-NEC to drivers who made more than $600 in the tax year and to the IRS on the 31st day of January after the tax year. However, you’re solely responsible to the IRS for calculating, reporting, and paying taxes on your income.
Usually, payments of estimated taxes by self-employed contractors are expected to come in quarterly. If you don’t report to the IRS, there may be penalties.
Amazon Flex Address for Unemployment
To file for unemployment with Amazon Flex, all you need to do is apply. Fill in the required details and supply all the necessary information about your status.
Fill in all details correctly. When asked whether you have a job, you should reply with a ‘NO.’ Also, when asked whether you are a gig worker, pick/input ‘YES.’
When you correctly impute this information, Amazon Flex will deny you regular employment and fill you in for the self-employed or independent contractor scheme.
Can I Write Off the Mileage for Amazon Flex?
Yes, you can write off mileage for Amazon Flex. Self-employed contractors like Amazon Flex drivers and other service providers in this category, e.g., the FBA (Fulfillment by Amazon) program, can write off mileage.
So, as an Amazon Flex driver, you need to track your mileage. The Flex app does not help you with this; you can use an automatic mileage tracker to make this easier.
The miles incurred while delivering packages around town are considered a “business mile.” You can charge for the business mileage based on the standard mileage rate or the expenses involved, such as gasoline or vehicle maintenance.
You cannot write off the miles you commute between home and the Amazon delivery station or between home and local stores. Your mileage starts when you leave the warehouse and ends when you return to the warehouse.
Apart from the mileage write-off benefit available to Amazon Flex drivers, you can also write off many other expenses. These include mobile phone bills, car insurance, parking, lease payments, vehicle registration, etc.
The miles incurred by Amazon Flex drivers while delivering Amazon packages are tax deductible. There are several methods of making this estimate, and one general approach is to track insurance, car maintenance, and gas expenses.
Below are the current mileage rates for the year 2022:
- Miles for January through June 2022 = 58.5 cents per mile
- Miles for July through December 2022 = 62.5 cents per mile
With these rates, you can calculate the total business mile deductible from your tax and value it in monetary terms.
For example, if you did 100 miles in 2022 (50 miles in each half of the year), your mileage tax deduction will be $60.5.
Amazon Flex Tax Forms – W2 or 1099
The appropriate tax form for Amazon Flex earnings from $600 and above is the 1099-NEC, and this form is for independent contractors or self-employed individuals. Employers mainly issue the W2 form to their employees (who are not self-employed).
The 1099 form issued by Amazon Flex to you—the independent contractor, gives details on the amount paid by Amazon Flex for the service you rendered to them during the tax year.
Once you have received your 1099 form, study the document correctly, particularly the section tagged ‘Box 7’, which shows the total amount paid to you in the tax year (your gross earnings).
Be sure the amount is the same as what you were paid. If there are any discrepancies, report such to Amazon Flex.
How to Get Tax Forms from Amazon Flex
If you have earned at least $600 with Amazon Flex during the year, you can download a copy of your 1099-NEC form from Amazon tax central.
If you earned less than $600 in the tax year, Amazon Flex will not send you a 1099 form. You can ask them to mail you a hard copy of the form.
How to Report Taxes for Amazon Flex
The following steps illustrate how to report your taxes for Amazon Flex.
- Get your 1099-NEC form (NEC stands for Non-Employee Compensation) from Amazon Flex. If you don’t qualify for a 1099-NEC, you must add direct deposits from Amazon Flex and report to the IRS.
- Fill out your Schedule C form: This shows the profit and loss
- Fill out your Schedule SE form: This shows the amount of tax you are to pay as a self-employed individual
- Attach both of these forms to your 1040 form
You should always consult with a tax professional so you don’t miss out on all your tax deductibles or make errors while reporting your taxes. If you stay organized, you can complete your tax calculations in a few minutes.
Is Amazon Flex Worth It?
With guaranteed earnings between $18 to $25 per hour aside from tips, Amazon Flex is a profitable side gig or self-employment option.
If you have some free time you want to convert into decent earnings, love driving around town, and do not mind having to deliver several packages at specified locations, Amazon Flex would comfortably check the box for you.
Amazon Flex does not take out taxes in line with the 1099 IRS tax regulations. As an Amazon Flex driver, you’re treated as an independent and self-employed contractor. You must do your tax calculations, make mileage tax deductions, and pay your taxes to the IRS as and when due.