Employee vs. independent contractor — which are you?
Instacart has two types of shoppers, and they're taxed differently:
| Shopper type | Tax treatment | Form received |
|---|---|---|
| Full-service shopper | Independent contractor — pays SE tax | 1099-NEC (if $600+) |
| In-store shopper | Instacart employee — taxes withheld | W-2 |
This guide is for full-service shoppers — the ones who shop and deliver using their own car. If you're an in-store shopper, Instacart withholds taxes from your paycheck and you file like any employee.
What taxes do full-service Instacart shoppers owe?
| Tax type | Rate | Notes |
|---|---|---|
| Self-employment tax | 15.3% of net profit | Social Security + Medicare (both halves) |
| Federal income tax | 10–22% (most shoppers) | Based on total income |
| State income tax | 0–9%+ depending on state | 9 states have no income tax |
Does Instacart send a 1099?
Yes. Instacart sends a 1099-NEC to full-service shoppers who earn $600 or more in a calendar year. You'll receive it digitally through the Instacart Shopper app in late January — check under Earnings → Tax Forms. If you earned under $600, Instacart doesn't file a 1099, but you're still required to report all income on your tax return.
Tips are taxable: Customer tips that flow through the Instacart app are included in your 1099-NEC total. You cannot exclude tips — they're treated identically to batch pay. If a customer tips you $20 in cash (rare on Instacart), that's also reportable income.
- →Employee vs. independent contractor — which are you?
- →What taxes do full-service Instacart shoppers owe?
- →Does Instacart send a 1099?
- →The mileage deduction for Instacart shoppers
- →Other deductions Instacart shoppers can claim
- →Quarterly estimated taxes
- →Common Instacart tax mistakes
- →Frequently asked questions
- →The bottom line
The mileage deduction for Instacart shoppers
This is your most valuable deduction. IRS standard mileage rates:
- 2024: 67¢ per mile
- 2025: 70¢ per mile (current)
- 2025: 70¢ per mile
Deductible miles for Instacart shoppers include:
- Home to the store for your first batch of the day
- Store to customer's address
- Between orders while you're actively accepting batches
The drive home after your last delivery is not deductible (commuting rule). Instacart's in-app mileage tracker tends to undercount — it often starts tracking after you arrive at the store, missing the home-to-store miles. Use a dedicated tracker like Stride or Everlance to capture everything.
Real example: A shopper earns $18,000 in a year and logs 14,000 business miles. At 70¢/mile, that's a $9,800 deduction. Net profit drops to $8,620. Total taxes: roughly $2,100 instead of $5,000+ without the deduction. Every mile tracked is worth about $0.25 in actual tax savings.
Other deductions Instacart shoppers can claim
- Insulated shopping bags and coolers — any bags you bought for Instacart orders
- Phone — business-use percentage — if 70% of your phone usage is Instacart work, deduct 70% of your monthly bill
- Phone mount and car charger
- Hand sanitizer and disinfectant wipes — used in stores while shopping
- Tolls and parking fees incurred during deliveries
- Car washes — business-use portion if you keep your car clean for delivery
- Health insurance premiums — if self-employed and not covered elsewhere
- Half of self-employment tax — the IRS lets you deduct 50% of SE tax as an income adjustment
Not sure where you stand?
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Check my shopper hustle — free →Quarterly estimated taxes
If you expect to owe more than $1,000 in federal tax for the year, pay quarterly at IRS.gov/payments:
- April 15 — Q1 income
- June 15 — Q2 income
- September 15 — Q3 income
- January 15 — Q4 income
A simple rule: set aside 25–30% of every Instacart payout into a separate account. Pay from that account quarterly, keep what's left at year-end.
Common Instacart tax mistakes
1. Missing home-to-store miles
The Instacart app doesn't start tracking until you're at the store in many cases. Those miles from your house to the first store are fully deductible. A third-party tracker running in the background solves this automatically — install Stride or Everlance before your first batch.
2. Not saving receipts for bags and equipment
Instacart shoppers buy insulated bags, coolers, and phone accessories throughout the year. Save every receipt in a photo folder (Google Photos, Apple Photos) or a free app like Expensify. $200–500 in small purchases adds up to real tax savings.
3. Treating tips as "bonus income" that doesn't count
Tips feel separate, but the IRS disagrees. All customer tips that flow through the app are on your 1099-NEC. Set aside the same percentage from tips as from base pay — they're identical to the IRS.
Frequently asked questions
Do Instacart shoppers have to pay taxes?
Yes. Full-service shoppers are independent contractors who owe self-employment tax (15.3%) plus federal and state income tax on net profit. Instacart withholds nothing.
Does Instacart send a 1099?
Yes — a 1099-NEC for full-service shoppers earning $600+. Available in the Shopper app under Earnings → Tax Forms in late January.
Can Instacart shoppers deduct mileage?
Yes. Home to store, store to customer, and between-order miles are all deductible at 70¢/mile (2025). Use a tracker like Stride — the in-app mileage tends to undercount.
Are Instacart tips taxable?
Yes. All tips paid through the app are included in your 1099-NEC and are fully taxable as self-employment income.
Do Instacart shoppers pay quarterly taxes?
Yes, if you'll owe more than $1,000 for the year. Pay at IRS.gov/payments by April 15, June 15, September 15, and January 15.
The bottom line
Instacart shoppers owe self-employment tax plus income tax on net profit — but the mileage deduction nearly always cuts taxable income in half or better. The most expensive mistake is not tracking miles from home to the store. Install a tracker before your next batch, set aside 25–30% of every payout, and pay quarterly if you'll hit the $1,000 threshold.
Your first year of Instacart taxes is the hardest. After that, you'll have real numbers to work from and can adjust your savings rate accordingly.
Know exactly where your shopping income stands
Our free checker looks at your earnings, state, mileage, and setup — then tells you exactly what you owe and what to do next.
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