Amazon Flex Taxes in Phoenix, Arizona - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in Phoenix, Arizona

Navigating the Valley of the Sun as an Amazon Flex driver offers flexibility, but understanding the tax implications is crucial for financial success. Delivering packages from Scottsdale to Mesa requires more than just a reliable vehicle; it demands proactive tax planning.

As an independent contractor for Amazon Flex, the IRS considers earnings subject to self-employment tax. This means reporting income and expenses on Schedule C (Profit or Loss From Business) with your Form 1040, and paying both income tax and self-employment tax (Social Security and Medicare) on net earnings exceeding $400.

How Arizona Handles Gig Worker Taxes

Arizona, as a state with a robust gig economy, requires residents to file a state income tax return regardless of income level. As an Amazon Flex driver residing in Arizona, you will need to report your self-employment income on Form 540, Arizona Individual Income Tax Return. Arizona operates under a flat income tax rate, currently at 2.5% for 2025. This means all taxable income is taxed at the same rate. It’s important to note that Arizona does not automatically withhold state income tax from your Amazon Flex earnings, so quarterly estimated tax payments are often necessary to avoid penalties. The Arizona Department of Revenue provides resources and tools for calculating and paying estimated taxes. Working in a large metropolitan area like Phoenix can present unique challenges, such as finding affordable parking during peak delivery times, which can add to business expenses. Demand fluctuates based on season and events, impacting potential earnings. Be aware of any city-specific ordinances regarding commercial vehicle parking or delivery zones within Phoenix. Arizona also allows for deductions similar to the federal level, such as business expenses, which can help reduce your overall tax liability. Keep meticulous records of all income and expenses related to your Amazon Flex work to ensure accurate tax filing.

You can find more information and resources on the Arizona Department of Revenue website: https://azdor.gov/

Top Tax Deductions for Phoenix, Arizona Drivers

• Standard Mileage: The most popular deduction for Amazon Flex drivers. The 2025 rate is 70 cents per mile. Given the relatively moderate gas prices in Phoenix compared to states like California or Washington, the standard mileage rate is often the most advantageous method.
• Tolls & Parking: While Phoenix doesn't have extensive toll roads, parking fees incurred during deliveries, especially in downtown Phoenix or near popular shopping centers, are deductible. Keep receipts!
• Phone & Data Plan: The portion of your monthly phone and data bill used for business purposes (tracking deliveries, using the Flex app, etc.) is deductible.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts for safe navigation, insulated hot bags for food deliveries, and even air fresheners can be considered deductible business expenses.

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 your employer withholds these taxes, as an Amazon Flex driver, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. This is a significant tax obligation, so proper planning and potentially making quarterly estimated tax payments are essential.