Amazon Flex Taxes in Arizona - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in Arizona

The Sonoran Desert offers more than just stunning landscapes; it's also a popular hub for Amazon Flex drivers seeking flexible earning opportunities. However, navigating the tax implications of independent contract work requires careful attention. As an Amazon Flex driver in Arizona, understanding your federal and state tax obligations is crucial for a smooth tax season.

The IRS considers Amazon Flex drivers independent contractors, meaning income earned through the platform is considered self-employment income. This necessitates reporting earnings on Schedule C (Profit or Loss from Business) with your Form 1040. Furthermore, because no taxes are withheld from your Flex earnings, drivers are responsible for paying self-employment taxes, which cover both Social Security and Medicare.

How Arizona Handles Gig Worker Taxes

As a resident of Arizona, you are generally required to file a state income tax return if your total income exceeds certain thresholds. Arizona operates under a flat income tax system, meaning all taxpayers pay the same rate regardless of income level. For the 2025 tax year, the Arizona flat income tax rate is 2.5%. Self-employment income earned through Amazon Flex is subject to this tax. The primary form used to report self-employment income and calculate Arizona income tax is Form 140, Arizona Individual Income Tax Return. You will need to report your Schedule C profit on this form. Arizona also allows for a deduction for the qualified business income (QBI) which may reduce your tax liability. It's important to note that Arizona does not automatically recognize the federal self-employment tax deduction; you must specifically calculate and claim it on your Arizona return. Arizona also has specific rules regarding estimated tax payments. If you expect to owe $1,000 or more in Arizona income tax, you are generally required to make quarterly estimated tax payments to avoid penalties. Resources and forms can be found on the Arizona Department of Revenue website: Arizona Department of Revenue. Keeping accurate records of income and expenses is vital for accurate state tax filing.

Top Tax Deductions for Arizona Drivers

• Standard Mileage: The most popular deduction for Amazon Flex drivers. The 2025 rate is 70 cents per mile. Given Arizona's expansive geography and the distances often covered for deliveries, this rate can significantly reduce taxable income.
• Tolls & Parking: While Arizona doesn't have extensive toll road systems, any tolls incurred during deliveries are deductible. Parking fees directly related to deliveries are also deductible.
• Phone & Data Plan: The portion of your phone and data plan used for business purposes is deductible. Keep records of business usage to justify the deduction.
• Vehicle-Related Costs: Expenses like car cleaning supplies, 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 year. Choose the method that yields the greater deduction.

Understanding the 15.3% Self-Employment Tax

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Unlike traditional employment, Amazon and other gig platforms do not withhold these taxes from your earnings. Therefore, it's your responsibility to calculate and pay this tax, typically through quarterly estimated tax payments to the IRS. The 15.3% applies to net earnings exceeding $400.