Taxes for Amazon Flex 1099 Delivery Drivers: Ultimate Guide

Christian is a copywriter from Portland, Oregon that specializes in fiscal write. He has published books, and loves to help autonomous contractors save money on their taxes. Sarah is a staff writer at Keeper Tax and has her enroll Agent license with the IRS. Her work has been featured in Business Insider, Money Under 30, Best Life, GOBankingRates, and Shopify. She has about a ten of public account experience, and has worked with clients in a across-the-board rate of industries, including oil and natural gas, manufacture, real estate of the realm, wholesale and retail, finance, and ecommerce. Sarah has extensive experience offering strategic tax plan at the state and union level. During her prison term in industry, she handled tax returns for C Corps, S corps, partnerships, nonprofits, and sole proprietorships. Sarah is a member of the National Association of Enrolled Agents ( NAEA ) and maintains her continuing education requirements by completing over 30 hours of tax discipline every year. In her spare clock, she is a devote cat ma and enjoys hike, bake, and overwatering her houseplants. This article will teach you all the tips and tricks you need to get your Amazon Flex taxes right. We ‘ll evening show you all the tax deductions you can take to bring your tax charge down a much as possible. a long as you have a car and a smartphone, delivering packages through Amazon Flex is a capital way to make some extra cash. At tax time, though, your life sentence can get reasonably complicated.

The taxes you have to pay as an Amazon Flex driver

If you drive for Amazon Flex, you ‘re classified as an mugwump contractor — not an Amazon employee. Like rideshare drivers, real estate agents, and even small business owners, you belong to a growing contribution of the US labor pull : people who want to set their own hours and be their own knob.
Independent abridge oeuvre means a fortune of exemption on the job, but things can get crafty when finances come into play. For one thing, Amazon wo n’t take care of withholding for you. equally far as taxes go, you ‘re on your own — which comes with some major headaches and some perks.
We ‘ll get to the full separate later. ( tip : It involves tax write-offs ! ) But for now, let ‘s talk about the not-so-fun gorge : 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 besides. 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 creditworthy for paying both shares of tax.
When people talk about “ self-employment tax, ” they ‘re referring to this double 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 indisputable 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, interim, vary widely depending on where you live. ( Some states, like Alaska and Florida, do n’t collect any at all ! )
All this can be a set to keep track of. To simplify things, try filing your taxes through Keeper Tax. Our tax file app shows you the claim forms you ‘ll need as a freelance worker, no matter where you ‘re based. And it never costs extra to file in more states. { filing_upsell_block }

How to file your Amazon Flex taxes

once you understand what precisely you ‘re paying, it ‘s clock to move onto the next step : figuring out how to file your self-employment taxes.
That means making sure you ‘ve got the correct forms .

1. Get your 1099-NEC from Amazon Flex

Form 1099-NEC reports the annual income you earned from an freelancer contract gig — like driving for Amazon. ( The NEC stands for “ nonemployee recompense, ” and it distinguishes this form from other types of 1099s, all of which are used to report respective kinds of income. )
The 1099-NEC is the independent contractor ‘s equivalent to form W-2, which traditional employees get every class. Both types of forms report your annual earnings. They ‘re besides sent out to the IRS.
❓Who gets a 1099-NEC from Amazon Flex
arsenic 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 former in the year — the company is n’t required to send you a form at all.
unfortunately, you ‘ll still have to report your income to the IRS, flush without a 1099. To make sure you do this correctly, just look through your depository financial institution statements and add up your direct deposits from Amazon Flex. { email_capture }

2. Fill out your Schedule C

Your 1099-NEC is n’t the lone tax form you ‘ll use to file. There ‘s besides Schedule C, which shows “ Profit and Loss From Business. ”
💸 Deducting your expenses on Schedule C
Schedule C is the phase you use to deduct your clientele expenses from your crude income.
Unlike the 1099-NEC, which you receive, already completed, from Amazon, you ‘ll fill out Schedule C. But the excess employment is worth it, since it ‘ll help you save on your taxes.
Let ‘s backtrack a snatch. Remember when we mentioned that spear work has both pros and cons when it comes to taxes ? We ‘ve spent a lot of time talking about the downsides. now, we last get to dig into the good news : you do n’t get taxed all your Amazon Flex earnings.

You should only always pay taxes on your internet business income — the come you have left after subtracting all your expenses.
We ‘ll talk more subsequently about these expenses in a bit. For nowadays, hang mean 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 measure of self-employment tax you owe .

3. Attach both forms to your 1040

once you ‘ve filled out both your agenda 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 worry. But it should besides help you.
How ? Putting all your business expenses into Schedule C helps lower the come 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 fully prison term, you ‘re probably racking up a fortune in car expenses every calendar month. even if Amazon Flex is a side hustle, your flatulence expenses will add up.
fortunately, 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 cable car expenses from your taxes.
You can deduct a flat rate for all the miles you drive for oeuvre. In this case, that means miles logged between cliff locations — driving between the Amazon warehouse and your house does n’t count. ( To learn more about mileage rules, check out our guide to business mileage vs. commuting mileage. merely the former is tax-deductible ! )
alternatively, you can just write-off a share of everything you spend on your car. ( This share 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 custodian Tax, keeping up with your car expenses is basically effortless. In summation to filing your taxes, the app automatically scans your bank accounts and credit cards for write-offs throughout the year. { upsell_block }
That way, you do n’t have to keep complicated records by hand — or break out a mileage tracker .

More write-offs for Amazon Flex drivers

Gas is n’t the alone thing you ‘ll need to pay for if you want to make it as a pitch driver. Could you imagine doing your job without a cell call, for case ?
precisely. That ‘s why it ‘s a write-off besides.
We ‘ve got a wholly roundup of Amazon Flex write-offs you can take to save extra money on your taxes. hera are some of the most crucial ones :

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

{ write_off_block }

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 startle 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 are n’t your taxes barely ascribable in April, precisely ? once again, it ‘s because you ‘re freelance.
Unlike a W-2 employee, your taxes are n’t withheld mechanically — meaning the IRS does n’t receive them in a steady drip throughout the year.
To make certain they ‘re still getting paid at regular intervals, the IRS asks you to make estimate tax payments, a prerequisite that kicks in equally long as you expect to owe them more than $ 1,000. These requital are due on the keep up 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 do n’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 pitch income is gloomy enough to get aside with not paying quarterly. )
Remember, the IRS is pretty inflexible 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 in the first place owed and can go all the way up to 25 %.
Gig proletarian taxes have their share of quirks. But now, you ‘re quick to deal with them all —and avoid expensive mistakes in the action. From how much money you owe to all the write-offs you can save on, you ‘re in commodity shape to get your Amazon Flex taxes right this year.

source : https://www.peterswar.net
Category : Finance

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