I’ve heard of a lot of people turning to side hustle gigs like Amazon Flex as a way to make extra money for saving, investing, financial independence, or retirement planning. Is Amazon Flex worth it to make extra money for investing or saving? That depends a lot on where you live, where the Amazon Flex gigs are, and what kind of car do you have.
Quick update: Between July 3 and July 9 if you deliver just one block, Amazon Flex will pay you a $40 bonus. That changes some of the calculus about whether Amazon Flex is worth it to you, at least in the short term.
Amazon Flex Pay
Amazon Flex pay varies based upon factors like day of the week, time of day, and how many drivers are available. For harder to cover times, Amazon Flex pays more. The Amazon Flex base rate varies by city.
Is Amazon Flex pay worth it? Yes, but only if you live close enough to where you pick up your Amazon Flex gigs. Calculate your time and mileage starting from when you leave your house and ending when you get back to your house. Now, figure out what you made with Amazon Flex on an hourly basis. If that number is high enough to make it worth your while and cover your gas cost, then Amazon Flex is worth it. If that hourly wage is too low for your time and effort, then Amazon Flex is not worth it.
Amazon Flex Mileage Deduction
Keep good records of your Amazon Flex deliveries including ALL mileage. Depending upon how you do your taxes, you should be able to deduct most of your mileage from Amazon Flex deliveries.
The IRS mileage rate for 2022 is 58.5 cents per mile from January 1st to June 30, 2022. After June 30, 2022, the IRS mileage rate went up for the second half of 2022. The IRS does this sometimes when gas prices increase dramatically after the mileage rate has already been set. For July 1, through December 31, 2022, the IRS mileage rate will be 62.5 cents.
Don’t think of this as a direct reimbursement. Your actual tax savings will depend upon how much income you have and how you file your taxes. You will not get 62.5 back on your taxes. Instead, if you were in the 20% tax bracket then you would actually save approximately (62.5 cents X 20%) 12.5 per mile off of your taxes. Look at your individual situation, however, because there are many factors that can make that number higher or lower. Remember, you taxable income includes all of your earnings, so your job, plus the money you make from Amazon Flex counts as income.
If you made more than $600 with Amazon Flex, Amazon will report that amount to the IRS. Be sure your taxes match that amount.