Walmart Spark Driver Taxes: Calculations, Deductions & Filing

The rise of the gig economy has opened up numerous opportunities for motivated individuals who prefer to work outside the confines of more traditional W-2 employment. Large companies like Uber, Lyft, and DoorDash are synonymous with gig work, but other well-known businesses are making an impact.

If you've placed an order for delivery with Walmart, chances are it was delivered to your residence by an independent contractor on the Spark Driver platform. Launched in 2018, the Spark Driver platform has worked with hundreds of thousands of independent contractors to fulfill orders from customers in urban, suburban, and rural locations. Over time, the Spark Driver platform has become Walmart's largest local delivery provider. 

While many individuals enjoy the flexibility of gig work, there are increased tax responsibilities associated with being your own boss. Key takeaways for Spark drivers include:

• Learn about the taxes you'll have to pay in connection with this work

• How to keep proper records in support of your finances

• Discover the top expense deductions for Spark drivers

• Determine the forms and information required to file your taxes 

Some of this guidance applies to other gig work you might perform outside of the Spark Driver platform.  

What Taxes Do Walmart Spark Driver Drivers Pay?

Whether full-time or part-time, gig workers must file a tax return if their net earnings are $400 or more annually.

Self-Employment Taxes

Gig workers will be responsible for paying a self-employment tax, which funds Medicare and Social Security. The IRS set the self-employment tax rate at 15.3%, which is the sum of two parts: a 12.4% Social Security tax rate and a 2.9% Medicare tax rate. 

Employers usually pay Medicare and Social Security taxes through FICA on behalf of their W-2 employees. They withhold wages to pay half of the tax and are obligated to pay the other half themselves. 

Federal Income Tax

You will be responsible for paying federal income tax, which is done via your Schedule C form to report profits and losses. Schedule C consists of five parts: 

• Income. List all business income, including gross receipts or sales, returns and allowances, and federal and state fuel tax credits. This calculates your gross profit and gross income.

• Expenses. Report business expenses such as cost of travel, utilities, insurance, and advertising. Subtract your total expenses from your gross income to find your net profit or loss. Report this result on IRS Form 1040.

• Cost of Goods Sold. If your business doesn't require you to purchase inventory or sell products, this section doesn't apply to you.

• Vehicle Expenses. If claiming deductions for car or truck expenses, complete this section. Keep detailed records of your mileage and vehicle expenses during the tax year.

• Other Expenses. Report any expenses that weren't listed above in the second part. Some of these expenses might include education or costs related to your industry.

You will attach your completed Schedule C to IRS Form 1040 and file your taxes. 

State and Local Income Tax

The state and local income taxes Spark drivers may be responsible for can vary by location. Because Spark drivers are independent contractors, they'll make quarterly estimated tax payments four times per year. Many states that require quarterly tax payments adhere to the same schedule as federal estimated tax payments.

If you have questions, contact state and local authorities or seek the advice of a qualified tax professional for expert guidance on your Spark Driver taxes. 

What Expenses Can I Deduct From My Walmart Spark Driver Income?

There are numerous deductions that drivers who work with Spark and other platforms can take advantage of. Some of the top Walmart Spark Driver platform deductions include: 

• Depreciation Expense. You can deduct the cost of business assets, including the vehicle you use as a Spark driver, over time via depreciation. You must follow IRS depreciation rules if the business assets you're writing off exceed $2,500 in value. Numerous factors dictate the amount and duration of your depreciation expense, including the depreciation method you apply. 

• Fees. You can write off the fees related to professional services you rely on to complete deliveries for the Spark Driver platform and manage your independent contractor business. Fees that qualify include mileage tracking software, navigation app subscriptions, bookkeeping software, and virtual accounting costs. 

• Tolls and Parking. You can deduct the tolls and parking fees you paid while delivering for the Spark Driver platform. Keep receipts from parking lots, garages, and tolls related to your deliveries.

• Phone and Internet. You need your phone to access the Spark Drive mobile application to access deliveries and navigate to your destination. You can deduct part of your bill since your phone service and data costs represent necessary business expenses. Track the portion of your cell phone and data usage related to your deliveries so you can deduct the business-related cost on your tax return.

• Fuel and Maintenance. You can deduct fuel and maintenance costs for your delivery vehicle. As with virtually every deduction, keeping receipts and other supporting documentation is essential. 

How to Keep Records of Your Walmart Spark Driver Expenses

It is critical to retain supporting documents and records to prepare your tax return and defend your interests during a possible audit. Whether your records are digital, physical, or a combination of the two, they must be kept in a safe and secure location.

Keep the following documents to support your Walmart Spark Driver platform expenses:

• IRS Form 1099-NEC

• Receipts for business purchases

• Mileage log, including business vs. personal travel

• Vehicle purchase paperwork

• Repairs and maintenance receipts

• Phone usage reports

• Bookkeeping records

• Business license paperwork

We recommend reviewing IRS guidance regarding record retention. 

How to File Taxes for Your Walmart Spark Driver Earnings

Review the following forms, processes, and deadlines you'll need to be familiar with to file your taxes as part of the Walmart Spark Driver platform. 

Required Forms

If you've made $600 or more on the Spark Driver platform in a year, Walmart will send you 

IRS Form 1099-NEC, Nonemployee Compensation. This form summarizes earned Spark Driver wages and is essential to filing taxes. Contact the Walmart Spark Driver directly if you do not receive this form by the end of January.

You may perform other work as an independent contractor outside of the Spark Driver platform or are a W-2 employee with Spark deliveries serving as a part-time side gig. In this scenario, you may also receive IRS Form 1099-K, Payment Card and Third Party Network Transactions, and IRS Form W-2, Wage and Income Statement.

Claiming Your Tax Deductions

Use IRS Form 1099-NEC as a supporting document for your tax return. Forms you may use to file your taxes and claim tax deductions include:

• IRS Form 1040. File Form 1040, U.S. Individual Income Tax Return, to report taxable income and calculate your tax liability for the year.

• IRS Schedule C (Form 1040). Report your income from the Spark Driver platform on IRS Form 1040, Schedule C, Profit or Loss from Business. Schedule C reports your self-employment income and business tax deductions. 

• IRS Schedule SE (Form 1040). Form 1040, Schedule SE, Self-Employment Tax, should be used to report your freelance income and calculate the self-employment tax liability. You’ll also need to pay income taxes, but you can deduct half of your self-employment tax. 

When to Pay Your Taxes

Self-employed individuals must estimate and pay quarterly estimated taxes throughout the year. Quarterly estimated tax payment due dates for 2025 include: 

• April 15, 2025

• June 16, 2025

• September 15, 2025

• January 15, 2026

Use IRS Form 1040-ES, Estimated Taxes for Individuals, to calculate and pay your quarterly estimated taxes. The form includes payment vouchers and instructions for filing online.

If you struggle to make accurate calculations by each deadline, our full-service quarterly estimated tax solution can help.

Let Our Experts Spark Your Path to Tax Savings

Juggling your tax responsibilities while delivering for Walmart's Spark Driver platform can be challenging. As your delivery business matures and grows, avoiding costly tax mistakes that invite penalties and unwanted scrutiny from the IRS is essential. That's why many drivers and gig workers trust 1-800Accountant, America’s leading virtual accounting firm, to deliver maximum tax savings. 

Whether you need business tax preparation, tax advisory, or any of our professional accounting services, we have the affordable solutions you need to ensure your self-employed delivery business doesn't spin its wheels. Schedule a quick consultation–usually 30 minutes or less—to learn more.