Amazon Flex Taxes in Alabama - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in Alabama

Delivering smiles across the Heart of Dixie with Amazon Flex offers flexibility, but it also comes with tax responsibilities. As an independent contractor, understanding these obligations is crucial for a smooth tax season.

The IRS requires Amazon Flex drivers to report their earnings on Schedule C (Profit or Loss From Business) with Form 1040. Crucially, income exceeding $400 requires the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your Flex earnings.

How Alabama Handles Gig Worker Taxes

As a resident of Alabama, you are required to file a state income tax return, even if no state income tax is due. Alabama utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, self-employed individuals will primarily use Form A-4 to calculate and remit their state income tax liability. Alabama also allows for itemized deductions, which may further reduce your taxable income. It's important to note that Alabama does not have a separate self-employment tax like the federal government; your federal self-employment tax calculation impacts your Alabama adjusted gross income. Furthermore, Alabama offers various credits and deductions that could benefit Flex drivers, such as those related to business expenses. Keeping meticulous records of all income and expenses is vital for accurate filing. The Alabama Department of Revenue provides detailed information and resources for self-employed individuals, including downloadable forms and instructions. Be aware of quarterly estimated tax payments, especially if your income is substantial, to avoid penalties at the end of the year. Consulting with a qualified tax professional familiar with Alabama tax law is highly recommended to ensure full compliance and maximize potential savings.

For more information, visit the Alabama Department of Revenue.

Top Tax Deductions for Alabama Drivers

• Standard Mileage: The most popular deduction for Amazon Flex drivers. For 2025, the rate is 70 cents per mile. Given Alabama’s generally reasonable gas prices, the standard mileage rate is often the most advantageous method.
• Tolls & Parking: While Alabama doesn’t have extensive toll road networks, any tolls incurred during deliveries are deductible. Parking fees directly related to deliveries are also deductible.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan that is used for business purposes. Keep a log of business usage to support this deduction.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, and insulated hot bags used specifically for deliveries are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, or repairs) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment where these taxes are withheld from your paycheck, as an Amazon Flex driver, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. Remember to factor this into your tax planning throughout the year.