⚡ Key Numbers for Instacart Shoppers in 2025
- Full-service shoppers = independent contractors, zero taxes withheld
- In-store shoppers = W-2 employees, taxes withheld automatically
- Self-employment tax: 15.3% on net profit for full-service shoppers
- Mileage deduction: $0.67 per business mile (2024 IRS rate)
- 1099-NEC sent by Jan 31 if you earned $600+ as full-service
- Set aside 25–30% of every Instacart deposit for taxes
Full-Service vs. In-Store Shoppers: Two Different Tax Situations
This is the most important thing to understand about Instacart taxes — and where a lot of shoppers get confused.
Full-service shoppers shop and deliver orders to customers. Instacart treats you as an independent contractor. That means no taxes withheld, you receive a 1099-NEC, and you're responsible for self-employment tax plus income tax. The upside: you have access to significant deductions including mileage, which can dramatically reduce your tax bill.
In-store shoppers shop orders in one store but don't deliver — Instacart classifies these workers as part-time W-2 employees. Taxes are withheld from your paycheck like a regular job. You'll receive a W-2 in January and file like a standard employee. Your deduction options are much more limited.
The rest of this guide focuses primarily on full-service shoppers, since that's where the tax complexity — and the savings opportunities — live.
Some Instacart workers do both full-service and in-store batches. If that's you, you'll receive both a W-2 and a 1099-NEC. Report the W-2 income normally and file Schedule C for your full-service earnings separately.
Your Instacart Tax Forms
1099-NEC (Full-Service Shoppers)
If you earned $600 or more as a full-service shopper, Instacart sends a 1099-NEC by January 31. Download it directly from the Instacart Shopper app: go to Earnings → Tax Documents. The form shows your gross earnings before Instacart's fees — your actual taxable profit will be lower once you subtract your business deductions on Schedule C.
W-2 (In-Store Shoppers)
In-store shoppers receive a standard W-2 from Instacart by January 31. This works exactly like any other employer W-2 — taxes were already withheld throughout the year, and you just plug the numbers into your tax software.
If you earned less than $600 as a full-service shopper, Instacart won't send a 1099-NEC — but the IRS still expects you to report and pay taxes on every dollar. Use your earnings history in the app to get your total for the year.
Quarterly Estimated Taxes for Full-Service Shoppers
If you expect to owe $1,000 or more in federal taxes for the year from your Instacart income, you're required to pay quarterly estimated taxes. Missing these payments results in an underpayment penalty added to your April bill — even if you pay everything in full by the deadline.
| Quarter | Income Period | 2025 Due Date |
|---|---|---|
| Q1 | January – March | April 15, 2025 |
| Q2 | April – May | June 16, 2025 |
| Q3 | June – August | September 15, 2025 |
| Q4 | September – December | January 15, 2026 |
Pay for free at irs.gov/payments using IRS Direct Pay. A practical estimate for most Instacart shoppers: multiply your net quarterly profit (after mileage and other deductions) by 27%. That covers SE tax plus a moderate income tax rate.
Instacart Mileage Deductions: Your Biggest Write-Off
For most full-service shoppers, mileage is by far the largest deduction. At $0.67 per mile (2024 IRS standard rate), the math adds up fast. Here's what counts as a business mile for Instacart shoppers:
- Driving from home to the store at the start of a batch
- Driving between stores if an order spans multiple locations
- Driving from the store to each customer's delivery address
- Driving back home after your last delivery of the day
A shopper doing 15,000 business miles a year generates a $10,050 deduction. At a combined 30% tax rate, that's over $3,000 in actual tax savings. The catch: you need a contemporaneous log. The IRS doesn't accept estimates — you need actual records for each drive.
Stride — Free Mileage Tracker for Instacart Shoppers
Runs in the background and logs every drive automatically. 100% free, no subscription. Also tracks expenses and estimates your quarterly taxes. The best free option for gig workers.
Download Free → Free forever · No credit cardEvery Tax Deduction Instacart Shoppers Can Claim
| Deduction | What Qualifies | Estimated Value |
|---|---|---|
| 🚗 Mileage | All business miles at $0.67/mile (full-service only) | $6,700+ / 10k miles |
| 📱 Phone | Business-use % of your monthly bill + phone cost | $200–$600/yr |
| 🧳 Insulated bags | Grocery bags, coolers, freezer bags used for orders | Full cost |
| 🅿️ Parking & tolls | Any parking or toll fees incurred during batches | Full cost |
| 💧 Car cleaning | Washes used to maintain your vehicle for deliveries | Full cost |
| 🏥 Health insurance | 100% of premiums if you're self-paying (not via employer) | $2,000–$8,000/yr |
| 💊 SE Tax deduction | 50% of your self-employment tax paid | $500–$3,000/yr |
| 📊 Tax prep fees | TurboTax Self-Employed, accountant fees (business portion) | Full cost |
| 📈 Retirement contributions | SEP-IRA or Solo 401(k) contributions | Up to $69,000/yr |
Instacart's app tracks the miles between acceptance and delivery for each batch — but it doesn't capture all your business miles (like driving to the store before accepting a batch). Use that data as a cross-check, but rely on a dedicated mileage app for your actual IRS deduction.
How Instacart Fees Affect Your Taxes
Instacart takes a service fee from each batch before your earnings are deposited. The good news: these fees are a deductible business expense. Your 1099-NEC will show your gross earnings — you'll subtract Instacart's fees as part of your Schedule C deductions, so you're not taxed on money you never actually received.
Your earnings summary in the Instacart Shopper app breaks this down clearly. You can see total earnings, Instacart fees, and tips separately — use those numbers when building your Schedule C.
How to File Your Instacart Taxes Step by Step
Step 1: Gather Your Records
- 1099-NEC from the Instacart Shopper app (Earnings → Tax Documents)
- Full-year mileage log from your tracking app
- Records of all deductible expenses with receipts
- Confirmation numbers for any quarterly estimated tax payments
Step 2: Complete Schedule C
Report your gross 1099-NEC income, then subtract all deductions — mileage, Instacart fees, phone costs, bags, and anything else. The resulting net profit is your taxable business income. Most shoppers find their taxable profit is significantly lower than gross earnings after deductions.
Step 3: Schedule SE and Form 1040
Schedule SE calculates your 15.3% self-employment tax on your net profit and the 50% SE tax deduction that reduces your adjusted gross income. This flows into your Form 1040 alongside any other income you have.
TurboTax Self-Employed — Best for Instacart Shoppers
Walks you through Schedule C with gig-worker-specific questions, handles the 1099-NEC correctly, and finds deductions most shoppers miss. Start free and only pay when you file.
Start Free on TurboTax → *affiliate linkCommon Instacart Tax Mistakes to Avoid
- Relying only on Instacart's mileage data: The app only tracks batch miles — not your drive to the store. A dedicated tracker captures significantly more deductible miles.
- Confusing full-service and in-store tax treatment: If you've done both, you need both a Schedule C and a W-2 on your return.
- Not tracking expenses as they happen: Trying to reconstruct a year's worth of receipts in March is painful. Log expenses weekly.
- Skipping quarterly payments: Even a few hundred dollars in quarterly payments keeps you penalty-free. Set reminders for all four due dates now.
- Using the wrong version of tax software: TurboTax Free and H&R Block Basic don't support Schedule C. You need the Self-Employed version.