Amazon Flex Taxes in Tennessee - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in Tennessee

The rolling hills and bustling cities of Tennessee offer a vibrant landscape for Amazon Flex drivers, but navigating the tax implications of gig work requires careful attention. As an independent contractor delivering packages across the Volunteer State, understanding your tax obligations is crucial for a smooth tax season.

All income earned through Amazon Flex is considered self-employment income and must be reported to the IRS on Schedule C (Profit or Loss From Business) when filing your federal income tax return. Crucially, this income is also subject to self-employment tax, covering both Social Security and Medicare, which Amazon – and other platforms – does not withhold. Proper record-keeping throughout the year is essential to accurately calculate your profits and deductions.

How Tennessee Handles Gig Worker Taxes

Tennessee offers a unique tax environment for independent contractors. The state boasts no state income tax on wages or salaries, meaning Amazon Flex earnings are not subject to Tennessee’s Hall income tax. However, this does not exempt drivers from federal income tax obligations. All earnings are still subject to federal taxes, including income tax and self-employment tax. Tennessee does collect sales tax, but this is generally handled by Amazon directly, and drivers are not typically responsible for collecting or remitting it.

While Tennessee doesn’t have a traditional income tax, it’s important to remember that the federal government requires reporting of all income. Many Tennessee residents benefit from the lack of state income tax, allowing for greater disposable income, but diligent tax planning is still vital. The state’s focus on low taxes and a business-friendly environment means resources are geared towards supporting business owners, but individual tax responsibility remains with the driver. Consider consulting with a local Tennessee tax professional to ensure full compliance with federal regulations and to explore any potential tax planning opportunities specific to your situation. For more information on Tennessee state taxes and business resources, visit the Tennessee Department of Revenue.

Top Tax Deductions for Tennessee Drivers

• Standard Mileage: The most popular and often most beneficial deduction. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Tennessee’s relatively moderate gas prices compared to states like California or Washington, the standard mileage rate is likely to be a very advantageous option for most drivers.
• Tolls & Parking: While Tennessee doesn’t have extensive toll road networks, 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 detailed records of business usage to support your deduction.
• Vehicle-Related Costs: Expenses like car cleaning supplies, phone mounts, dash cams, hot bags (for food deliveries, if applicable), and other items used specifically for your Amazon Flex work 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. You must choose the method that results in the largest deduction.

Understanding the 15.3% Self-Employment Tax

As an Amazon Flex driver, you are considered self-employed. This means you are responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This combined tax is 15.3% on net earnings over $400. Remember, Amazon does not withhold these taxes from your earnings, so it’s crucial to set aside funds throughout the year to cover this liability when filing your taxes.