Amazon Flex Taxes in Arkansas - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in Arkansas

The Natural State offers a growing opportunity for independent contractors delivering with Amazon Flex, but navigating the tax implications requires careful planning. As an Amazon Flex driver in Arkansas, 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 deliveries is considered self-employment income. This necessitates reporting earnings on Schedule C (Profit or Loss from Business) with your Form 1040, and paying self-employment taxes – covering both Social Security and Medicare – on net earnings exceeding $400.

How Arkansas Handles Gig Worker Taxes

As a resident of Arkansas, you are required to file a state income tax return, even if no Arkansas income tax is ultimately due. Arkansas utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Arkansas residents reporting self-employment income will primarily use Form AR1040 and Schedule IN (Income). The Arkansas Department of Finance and Administration provides detailed information and resources for self-employed individuals. It's important to note that Arkansas does not have a separate self-employment tax like the federal government; your federal self-employment tax calculation will impact your Arkansas adjusted gross income. Arkansas also allows for deductions similar to the federal level, such as the qualified business income (QBI) deduction, which may reduce your taxable income. Keep meticulous records of all income and expenses to accurately calculate your Arkansas tax liability. Furthermore, estimated tax payments may be required throughout the year if you anticipate owing more than $1,000 in Arkansas income tax. Failing to make sufficient estimated payments can result in penalties. The Arkansas Department of Finance and Administration offers online tools and publications to help determine if estimated tax payments are necessary.

You can find more information on Arkansas state taxes here: Arkansas Department of Finance and Administration

Top Tax Deductions for Arkansas Drivers

• Standard Mileage: The most popular deduction for Amazon Flex drivers. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Arkansas's relatively moderate gas prices, the standard mileage rate is often the most advantageous method for maximizing deductions.
• Tolls & Parking: While Arkansas 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 monthly phone and data plan used for business purposes is deductible. Keep records demonstrating the business use percentage.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, and insulated food delivery bags are deductible as business expenses.

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

Understanding the 15.3% Self-Employment Tax

As an independent contractor, you are responsible for paying self-employment tax, which covers both Social Security and Medicare. Amazon, and other delivery platforms, do not withhold these taxes from your earnings. The combined rate is 15.3% on net earnings over $400. You'll calculate this tax on Schedule SE (Self-Employment Tax) and include it with your Form 1040.