Amazon Flex Taxes in New Mexico - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in New Mexico

The Land of Enchantment offers unique opportunities for Amazon Flex drivers, but navigating the tax landscape requires careful planning. As an independent contractor delivering packages across New Mexico, understanding your tax obligations is crucial for a smooth tax season.

The IRS requires all Amazon Flex drivers to report their income on Schedule C (Profit or Loss From Business) with Form 1040. Because you are classified as self-employed, you are also responsible for paying self-employment taxes, which cover both Social Security and Medicare. This is in addition to your regular income tax liability.

How New Mexico Handles Gig Worker Taxes

As a resident of New Mexico, you are required to file a state income tax return, even if no New Mexico income tax is due. New Mexico utilizes a graduated income tax system, meaning the tax rate increases as your income increases. This means the amount of tax you owe depends on your total taxable income and filing status. The primary form for self-employed individuals to report income and calculate tax liability is Form NMPR-4, New Mexico Personal Income Tax Return. New Mexico also requires you to report your federal Schedule C income on Form NMPR-4.

New Mexico does not have a separate self-employment tax like the federal government. However, the federal self-employment tax is factored into your New Mexico adjusted gross income (AGI) calculation, which ultimately impacts your state income tax liability. It's important to accurately report your federal self-employment tax on your New Mexico return. New Mexico also allows for certain deductions that can reduce your taxable income, such as contributions to qualified retirement plans. Keep detailed records of all income and expenses throughout the year to ensure accurate filing. For more information and resources, please visit the New Mexico Taxation and Revenue Department website: https://www.tax.newmexico.gov/

Top Tax Deductions for New Mexico Drivers

• Standard Mileage: The most popular deduction for Amazon Flex drivers. The 2025 rate is 70 cents per mile. Given New Mexico's relatively moderate gas prices compared to states like California, the standard mileage rate is often a very advantageous option, simplifying record-keeping.
• Tolls & Parking: While New Mexico 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: 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 your 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, repairs, insurance) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment 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 of these taxes. Platforms like Amazon Flex do not withhold these taxes for you, so it’s crucial to plan for this expense throughout the year, potentially making estimated tax payments quarterly to avoid penalties.