Amazon Flex Taxes in Seattle, Washington - 2026

Updated for 2026 (Filing 2025 Taxes)

The Seattle Flex Driver's Definitive Tax Guide

Navigating the steep hills of Queen Anne or the rainy, stop-and-go traffic of I-5 requires more than just good driving skills: it requires a smart tax strategy. As an Amazon Flex driver in Seattle, you aren't just a delivery partner; you're a small business owner in the eyes of the IRS. While the flexibility is great, you're now responsible for managing your own tax withholdings and filings.

Since you're an independent contractor, Amazon won't withhold taxes from your paychecks. You'll report your earnings on Schedule C of your Form 1040. This means you're responsible for the 15.3% self-employment tax, which covers Social Security and Medicare. However, there's good news: because you're a business owner, you can access powerful deductions that traditional employees can't touch.

The 20% QBI Deduction: A Massive Win for Seattle Drivers

One of the most overlooked benefits for gig workers is the Qualified Business Income (QBI) deduction. Under Section 199A, most Amazon Flex drivers can deduct up to 20% of their net business income right off the top before income taxes are even calculated. This isn't an expense you have to pay for: it's a straight deduction based on your profit. If your Flex work in Seattle nets you $10,000 in profit after expenses, the IRS may allow you to exclude $2,000 of that from your taxable income. It's a major way to keep more of your Ballard or Capitol Hill delivery earnings in your own pocket.

Washington State and Seattle-Specific Tax Rules

Living in Seattle comes with a unique tax perk: Washington has no state personal income tax. However, you shouldn't ignore the state's Business & Occupation (B&O) tax. This is a tax on gross receipts, meaning it's based on every dollar you earn before deductions. While most Flex drivers won't reach the high annual gross income threshold (currently $125,000 for many small businesses) to actually owe B&O tax, you're technically required to register with the Department of Revenue if your income exceeds certain levels.

Additionally, keep in mind that Seattle has specific labor laws for "App-Based Workers." While these often relate to minimum payment standards and paid sick time, they reinforce the fact that you need to treat your Flex work as a formal business enterprise. For more details on state-level requirements, check the Washington State Department of Revenue website.

Maximizing Your Deductions: Standard Mileage vs. Actual Expenses

The biggest decision you'll make is how to deduct your vehicle costs. Our Advanced Calculator is designed to help you solve this puzzle by comparing the two primary methods:

• Standard Mileage Rate: For 2025, the rate is 70 cents per mile. This covers everything: gas, insurance, repairs, and depreciation. Given Seattle's high gas prices, this is often the simplest and most lucrative choice.
• Actual Expenses: This method allows you to deduct the specific costs of operating your vehicle. This includes gas, new tires, oil changes, and insurance premiums. Most importantly, it includes Depreciation, which accounts for the wear and tear your car takes from those constant climbs up and down Seattle's hills.

If you're driving a brand-new, expensive SUV for deliveries, the Actual Expense method (including depreciation) might save you more. If you're driving an older, fuel-efficient hybrid, the Standard Mileage rate is usually the winner. Use our Advanced Calculator to run both scenarios before you file.

The Home Office Deduction: Your "Command Center"

Many Flex drivers don't realize they can claim a Home Office deduction. If you use a specific area of your home exclusively to manage your delivery business - such as tracking your Seattle routes, sorting digital receipts, or scheduling blocks - you can deduct a portion of your rent, utilities, and insurance. Our Advanced Calculator can help you determine your "Administrative Home Office" savings using either the simplified $5-per-square-foot method or the more detailed actual expense method.

Top Seattle-Specific Deductions to Track

• Parking and Tolls: If you're delivering in Downtown or South Lake Union, parking isn't just a headache - it's a deduction. Tolls on the SR-520 bridge are also fully deductible as long as they occur while you're actively working.
• Weather Gear: Seattle rain is relentless. If you buy branded or specialized rain gear, high-visibility vests, or non-slip footwear specifically for your delivery work, those are legitimate business expenses.
• Phone and Data: You can't do this job without the Flex app. Deduct the percentage of your phone bill and data plan that corresponds to your work hours.
• Roadside Assistance: Memberships like AAA are partially deductible based on the percentage of time you use your car for Flex.

A Note on Self-Employment Tax (15.3%)

While the lack of state income tax is a relief, the 15.3% federal self-employment tax remains your biggest hurdle. Since this covers both the employer and employee portions of Social Security and Medicare, it adds up fast. We recommend setting aside at least 25% to 30% of your net income to cover these costs and any potential federal income tax. Making quarterly estimated payments is the best way to avoid a massive bill and "underpayment penalties" when April rolls around. Staying proactive ensures that your Seattle delivery business stays profitable and stress-free.