Been shopping for Instacart? Then you’re self-employed—which means taxes work completely differently than a regular job. The good news? You can deduct a ton of expenses. The bad news? Nobody tells you what those are.
After two years of Instacart shopping (and one expensive lesson with the IRS), I’ve figured out exactly what you can and can’t deduct. Let me save you the headache.
How Instacart Taxes Work
Quick basics first:
- You’re an independent contractor, not an employee
- Instacart sends you a 1099-NEC if you earned $600+
- You pay self-employment tax (15.3%) plus income tax
- You should pay quarterly estimated taxes
- You can deduct business expenses to lower your bill
The Big One: Mileage Deduction
This is where most of your tax savings come from. The 2025 IRS rate is 70 cents per mile.
What Miles Count for Instacart?
- ✓ Driving to the store for a batch
- ✓ Driving from store to customer
- ✓ Driving between batches while app is on
- ✓ Driving to a hotspot area
- ✗ Driving from home to your first batch (commuting)
- ✗ Personal errands during your shift
Example Mileage Savings
| Batches/Week | Est. Weekly Miles | Annual Deduction | Tax Saved* |
|---|---|---|---|
| 20 | 150 | $5,460 | $1,201 |
| 30 | 225 | $8,190 | $1,802 |
| 40 | 300 | $10,920 | $2,402 |
*Assumes 22% tax bracket
Complete List of Instacart Deductions
Vehicle Expenses
- Mileage (70¢/mile) OR actual car expenses (not both)
- Parking fees while shopping or delivering
- Tolls during deliveries
Phone & Technology
- Cell phone bill (business % – typically 50-75%)
- Phone mount for your car
- Car charger and cables
- Portable battery pack
- Data plan overage charges from gig use
Delivery Supplies
- Insulated bags (hot and cold)
- Cooler bags for frozen items
- Hand sanitizer and wipes
- Reusable shopping bags
- Box cutter for opening packages
Clothing & Safety
- Comfortable shoes for shopping (arguably deductible)
- Rain gear
- Winter gloves for handling frozen items
- Reflective vest for night deliveries
Other Deductions
- Portion of home internet (if you accept batches from home)
- Health insurance premiums (if self-employed and paying your own)
- Tax software or accountant fees
- Business bank account fees
What You CAN’T Deduct
Don’t try to write these off:
- Food and drinks for yourself while working
- Clothing that can be worn outside of work (regular clothes)
- Traffic tickets or parking violations
- Your personal phone (only business use %)
- Instacart shopper card purchases (those aren’t your expenses)
How to Track Everything
- Download a mileage app (Stride is free and auto-tracks)
- Open a separate bank account for Instacart income
- Save receipts (take photos with your phone)
- Log expenses weekly in a spreadsheet or app
Quarterly Tax Payments
If you’ll owe more than $1,000 in taxes, the IRS wants quarterly payments:
| Quarter | Due Date |
|---|---|
| Q1 (Jan-Mar) | April 15, 2025 |
| Q2 (Apr-May) | June 16, 2025 |
| Q3 (Jun-Aug) | September 15, 2025 |
| Q4 (Sep-Dec) | January 15, 2026 |
Frequently Asked Questions
Does Instacart report my earnings to the IRS?
Yes, if you earned $600 or more. You’ll get a 1099-NEC. But even if you earned less, you still need to report it.
Can I deduct the groceries I buy for customers?
No. You’re buying those with Instacart’s money (via the shopper card), not yours. They’re not your expense.
What about tips?
Tips are taxable income. They should be included in your 1099 or reported separately. Either way, you owe taxes on them.
Should I use mileage or actual car expenses?
Usually mileage wins. It’s simpler and typically gives a bigger deduction. Only consider actual expenses if you have a very expensive car with high costs.
Start Tracking Now
Every day without tracking is money lost. Download Stride, save your receipts, and set aside 25-30% of your earnings for taxes.
Instacart taxes don’t have to be stressful—just stay organized throughout the year.