Guide To Amazon Flex Taxes For Delivery Drivers

If you work as an Amazon Flex Delivery Driver and are unclear about your tax status and formalities, this guide will help you understand how to file taxes in 2023.
Amazon Flex Delivery Driver
Guide To Amazon Flex Taxes For Delivery Drivers
Amazon Flex delivery drivers are classified as an independent contractor and not an employee. So, Amazon may not take care of withholding for you. Here's a detailed guide to help you file taxes in 2023.

In this article

The lives of Amazon Flex delivery drivers are already busy and complicated. Having to deal with self-employment taxes can add a significant amount of stress to an already stressful job.

The following guide can answer your questions related to your tax status or responsibilities if you drive for Amazon Flex. With Beem, America’s first Al-powered Smart Wallet App, you’ll be able to get your business accounting and tax bookkeeping under control in a simple and affordable way.

Filing Taxes As An Amazon Flex Delivery Driver

If you have earned at least $600 during the tax year working as an Amazon Flex delivery driver, you can expect to receive a 1099 form.

The IRS defines 1099 forms as “information returns,” which are tax returns containing taxpayer-identifying information but not tax liabilities. The form is used to specify the earnings made from a given contract without calculating the tax debt on any of those earnings.

Clients or employers who work with freelancers or independent contractors typically fill out a 1099 form, which they then send both to the freelancers and the IRS. There are a number of different versions of the 1099 form, each one designed for different kinds of non-salary income.

Is Amazon Flex Income Taxed?

There is no exception to the requirement that American taxpayers pay taxes on every dollar they earn! It means regardless of how much money you make as a Flex driver for Amazon, you have to pay tax on it.

In the event that you don’t receive a 1099-NEC from Amazon Flex, which you are supposed to receive by April 15, you must still report that income on Schedule C of IRS form 1040 (which is your tax return for the prior tax year).

Independent contractor income and expenses are reported on Schedule C, which accounts for the “Profit or Loss from Business.”

Forms For Amazon Flex Delivery Drivers

Some of the common forms Amazon Flex Delivery Drivers can receive during the 2023 tax season are:

1099-NEC: If you earn over $600 with Amazon Flex, you will receive the “non-employee compensation” 1099 form (if it’s under $600, you will not receive the form, but you must still report the income to avoid penalties).

Form 1099-K: In the event that you make a virtual sale via a third-party platform, such as PayPal, the K forms are used to keep track of the transaction.

Receiving Your 1099 From Amazon Flex

In order to receive a 1099 from Amazon Flex, you must complete a W-9 form, which provides the company with your personal information.

You should receive your 1099-NEC form from Amazon Flex by late January/early February if you earn at least $600 per tax year.

What to do if you don’t receive a 1099 from Amazon

Drivers are not all supposed to receive 1099-NECs. The company isn’t needed to send you a form if your Amazon Flex income is less than $600.

Although if you don’t receive a 1099, you must still file your income taxes with the IRS. Simply add up your Amazon Flex direct deposits on your bank statements to make sure you’re doing this right.

Taxes For W2 vs 1099 Workers

Typically, W-2 employees don’t have to worry about paying their taxes on time as their employers withhold estimated taxes from each paycheck throughout the year.

Individuals who work for themselves, for instance, ride-hailing drivers or food/retail delivery drivers, pay taxes differently. It is required to estimate your salary for the upcoming tax year. At the same time, review your quarterly estimated taxes and tax return.

Drivers who are self-employed using apps such as Amazon Flex are responsible for paying the following taxes:

Federal Income Tax: Anyone who earns income in the United States is affected by this tax (you can find your marginal tax brackets based on your salary range in 2021 by clicking here).

State Income Tax: The U.S. imposes a flat-rate income tax in some states, a graduated-rate income tax in others and no income tax in some states.

Self-Employment Tax: The self-employment tax of 15.3% includes Social Security and Medicaid tax for self-employed taxpayers, who must comply with the following rules if they want to avoid any penalty:

Ensure that the estimated taxes aren’t underpaid, which incurs a fine. 

On a quarterly basis, make your estimated tax payment by the IRS-specified deadline (ignoring the deadline and paying estimated taxes late will also result in financial penalties).

Are Amazon Flex Driver Expenses Deductible?

You can deduct expenses incurred while driving for Amazon Flex from your income as self-employment tax deductions. The purpose of a tax deduction is to reduce income subject to taxation and increasing your return.

You can figure out your taxable income by subtracting all the qualifying deductions from your Adjusted Gross Income (AGI). It’s obvious that the lower your AGI, the less tax you’ll have to pay. In contrast, the less taxes you pay, the more money you can reinvest into your business.

Keeping all your expense receipts and mileage records is therefore a regular habit that should not be neglected.

For Amazon Flex drivers, the following business expenses can be deducted from their gross income:

  • Mileage/Gas Expenses: While making deliveries for Amazon Flex, drivers can deduct business miles. When calculating deductions, drivers can choose between “standard mileage” and “actual expense.”
  • Cellular phone costs: Deduct the cost of your phone bill you used for the business.
  • Parking/Toll Fees: Deductions are available for parking and road tolls incurred while making deliveries for Amazon Flex.

If you save business expense receipts, you can claim more deductions.

Penalties For Underreporting/Misreporting Of Income

The IRS recommends reporting all 1099 income accurately. Chances are, they received a copy from your client/employer, and their software has “red-flagged” your account for something “fishy.” It is likely that the IRS will catch a missing 1099. In such a s case, they can contact you to clarify any discrepancies they find.

Of course, such offenders are penalized by the IRS with fines and interest! Depending on the amount of tax liability that they determine. The IRS may impose a penalty of 50-200% on the tax liability for income that has been omitted. The penalty amount may vary depending on whether the IRS determines the income either “underreported” (due to unintended negligence) or “misreported” (due to fraud).

Conclusion

Let’s take a step back. Remember when we said gig work has both benefits and cons when it comes to taxes? During our discussion, we focused largely on the downsides. Fortunately, you don’t have to pay taxes on all your Amazon Flex earnings.

Was this helpful?

Did you like the post or would you like to give some feedback? Let us know your opinion by clicking one of the buttons below!

👍👎
Team Beem

Team Beem

Team Beem brings you the latest in the world of personal finance to you. From tips and tricks on how to manage money to how to get cash for emergencies, Beem is your destination for all the information you need to be smart about your money.

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

Related Posts

do i get taxed in high yield savings account

Do I Get Taxed in a High Yield Savings Account? Best Tips

Compared to conventional savings accounts, HYSAs provide appealing interest rates that enable you to grow your funds more quickly. But, Do I get taxed on high-yield savings account? Let's find out!
benefits of filing taxes online

What Are The Benefits of Filing Taxes Online? The Ultimate Guide

Filing taxes is an essential responsibility for every American citizen and resident, but how we do it has evolved significantly over the years. Gone are the days of paper forms, long queues, and complex calculations. Today, technology has revolutionized the process, making it more convenient, efficient, and accessible than ever before. 
tax extension 2023

When Are Taxes Due With Extension in 2023: File for Free Now 

As the tax year progresses, individuals and businesses may need more time to complete their tax returns accurately. Here's everything you need to know about tax extensions 2023.
July 31 deadline

How to File Last Minute Taxes in States With July 31 Deadline

Before diving into the tax-filing process, it's essential to understand the significance of the July 31, 2023 tax deadline. Filing taxes after the deadline can lead to penalties and interest charges. Understanding the consequences of late filing can motivate you to file on time or seek an extension if necessary. Let's explore!
How to Avoid Tax Penalties in States with Tax Deadline July 31

How to Avoid Tax Penalties in States With July 31 Deadline

Failure to file taxes or pay them on time can result in various penalties and interest charges. The blog aims to resolve all your queries regarding the July 31 tax deadline in Tennesse, Arkansas, Indiana and Mississippi and avoid penalties.

New York Tax Deadline: File by May 15 to Avoid Penalties

In March, the Internal Revenue Service announced major tax relief for certain disaster-hit states, including New York. The agency extended the New York tax deadline in certain counties to May 15, 2023, to provide more time to affected individual taxpayers and businesses to file their 2022 tax returns.

Save big on auto insurance - compare quotes now!

Zip Code:
Zip Code: