Amazon Flex Taxes in Colorado - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in Colorado

The Rocky Mountain high extends to the flexibility of earning with Amazon Flex, but navigating the tax implications requires careful planning. As an independent contractor delivering packages across the Centennial State, understanding your tax obligations is crucial for a smooth tax season.

The IRS considers Amazon Flex drivers independent contractors, meaning earnings are reported on Schedule C (Profit or Loss From Business) with your Form 1040. Crucially, this also means no taxes are automatically withheld from your paychecks. Therefore, it’s essential to proactively plan for and pay self-employment taxes, which cover both Social Security and Medicare, on any net earnings exceeding $400.

How Colorado Handles Gig Worker Taxes

As a resident of Colorado, you are required to file a state income tax return, even if your only income is from Amazon Flex. Colorado operates under a flat income tax rate, currently at 4.40% for the 2025 tax year. This means all taxable income is taxed at the same rate, simplifying the calculation process. Self-employed individuals in Colorado will primarily use Form DR 0400, Colorado Individual Income Tax Return, to report their income and calculate their tax liability. Remember to include your Schedule C profit as part of your total income on Form DR 0400. Colorado also allows for itemized deductions similar to the federal level, which can further reduce your taxable income. It's important to note that Colorado does not offer a separate state-level self-employment tax; your federal self-employment tax calculation will impact your overall Colorado tax liability. Furthermore, Colorado has specific rules regarding estimated tax payments. If you anticipate owing $1,000 or more in Colorado income tax, you are generally required to make quarterly estimated tax payments to avoid penalties. Resources and forms can be found on the Colorado Department of Revenue website: Colorado Department of Revenue. Staying informed about any changes to Colorado tax laws is vital, as they can impact your tax obligations as an Amazon Flex driver.

Top Tax Deductions for Colorado Drivers

• Standard Mileage: The most popular deduction for Amazon Flex drivers. The 2025 rate is 70 cents per mile. Given Colorado’s diverse terrain and potential for driving in varying conditions, this rate can significantly reduce your taxable income.
• Tolls & Parking: While Colorado doesn’t have extensive toll road networks like some states, any tolls incurred during deliveries are deductible. Parking fees directly related to deliveries are also deductible.
• Phone & Data Plan: If you use your personal phone for Amazon Flex work (tracking routes, communicating with customers, etc.), you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts for safe navigation, and insulated hot bags for food deliveries are all deductible business expenses.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas or repairs in the same year. Choose the method that yields the largest 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 liability, so accurate record-keeping and proactive tax planning are essential.