The Short Answer
If you’re an Instacart full-service shopper, you’re an independent contractor. Instacart doesn’t withhold a dollar from your pay, and at year-end you’re responsible for self-employment tax plus regular income tax on your earnings.
Two things catch first-time Instacart filers off guard: thinking the grocery totals on your batches count as income (they don’t), and not realizing how significant the mileage deduction can be given how much driving the job involves. This guide walks through both.
Full-Service vs. In-Store Shopper
Before anything else, confirm which type of shopper you are, since it changes everything about how you file.
Full-service shoppers use the Instacart app to shop at various stores and deliver to customers. They set their own schedule, work across multiple retailers, and are classified as independent contractors. This guide is for full-service shoppers.
In-store shoppers work at a single store on a set schedule and don’t deliver. They’re typically W-2 employees. If that’s you, Instacart withholds taxes, and you’ll receive a W-2 at year-end rather than a 1099.
What Actually Counts as Your Income
This is where most first-time Instacart shoppers make an error. The total value of the groceries in your batches is not your income.
When you shop using the Instacart payment card, you’re spending Instacart’s money. That amount is reimbursed to Instacart and never touches your taxable income. Your earnings are:
- Base batch pay: the amount Instacart pays per batch, based on item count, complexity, and distance
- Customer tips: fully taxable
- Bonuses and promotions: peak pay, challenge completions, and any incentive payments
Instacart issues a 1099-NEC to full-service shoppers who earn $600 or more in a calendar year. If you earned less than $600, no form is issued, but you’re still required to report all self-employment income if your net earnings from all sources exceed $400 for the year.
Your complete earnings history is available in the Instacart shopper app, which is your record regardless of whether a 1099 was issued.
What You Actually Owe
Self-Employment Tax
Self-employment tax is 15.3% of net self-employment income. It covers Social Security (12.4%) and Medicare (2.9%). As a contractor, you pay both the employee and employer sides of this tax. You can deduct half of what you pay in self-employment tax from your gross income, which partially offsets the cost. Tax software handles this automatically.
Income Tax
Your Instacart net profit is added to any other income you have and taxed at your regular federal income tax rate. For most shoppers, this falls between 10% and 22% depending on total income and filing status.
A Realistic Example
If your net Instacart profit for the year is $9,000 after deductions:
- Self-employment tax: approximately $1,271 (15.3% applied to 92.35% of $9,000)
- Federal income tax: depends on total income and filing status
- State income tax: varies by state
Setting aside 25 to 30 percent of net profit consistently throughout the year keeps the April bill manageable.
Deductions That Reduce What You Owe
Mileage
Mileage tends to be the largest deduction for Instacart shoppers because the job involves meaningful driving: to the store, potentially to multiple stores for multi-store batches, and then to the customer’s home. The IRS standard mileage rate for 2026 is 72.5 cents per mile. If you’re filing your 2025 return, the rate for that year was 70 cents per mile.
What qualifies: miles from accepting a batch through final dropoff, including driving to the store. Multi-store batches include the mileage between stops.
What doesn’t qualify: driving from home to the store before you’ve accepted a batch, and any personal miles.
Instacart does not track your full driving mileage automatically. Use a mileage tracking app and log trips throughout the year — see our mileage tracking app comparison for the best options. Reconstructing mileage later from batch history and map estimates is possible but significantly weaker documentation if you’re ever audited.
Phone
The business-use portion of your phone bill is deductible. If you use your phone 50% for Instacart work, 50% of your monthly bill and related accessories are deductible. Apply a percentage you can support given your actual earnings and usage.
Insulated Bags and Equipment
Insulated bags, coolers, and delivery equipment purchased specifically for your Instacart work are deductible as business supplies. These often add up more than people expect once you account for the quality bags needed to keep groceries safe.
What You Cannot Deduct
- Car payments
- Groceries you purchased for personal use
- Parking tickets and traffic fines
- General clothing
Quarterly Estimated Taxes
If you expect to owe $1,000 or more in federal taxes for the year, the IRS expects quarterly payments rather than waiting until April. Our quarterly estimated taxes guide covers the due dates, calculation methods, and safe harbor rules in full. Pay directly through IRS Direct Pay at IRS.gov at no charge.
Tax Software Worth Knowing About
For most Instacart shoppers with a straightforward tax situation, self-filing with software is a realistic option.
TurboTax Self-Employed guides you through self-employment income and deductions with prompted questions and handles Schedule C well. The most well-known option, though also the most expensive.
H&R Block Self-Employed covers the same ground at a lower price point, with a comparable interface for most gig worker scenarios.
TaxSlayer Self-Employed handles Schedule C and SE without premium pricing. Less hand-holding than TurboTax, but fully capable if you’re comfortable with the basics.
FreeTaxUSA is the lowest-cost option that supports self-employment income. Bare-bones interface but entirely adequate for standard Instacart shopper tax situations.
See our full tax software comparison for gig workers for current pricing and a side-by-side feature breakdown. Check current pricing before filing season, as rates can change.
Step-by-Step: How to File
Step 1: Pull your earnings summary from the Instacart shopper app Download your annual earnings breakdown: batch pay, tips, and bonuses. If you received a 1099-NEC, verify it matches your records. The in-app summary is your earnings record.
Step 2: Total your deductible miles Export your mileage log if you tracked with an app. If you didn’t, estimate from batch history and typical distances, understanding that a logged record is much stronger documentation.
Step 3: Add up other deductions Phone expenses, insulated bags, and any other qualifying business costs. Keep receipts.
Step 4: Complete Schedule C Report your self-employment income and deductions on Schedule C. Net profit flows to the rest of your return. Tax software generates this based on your answers.
Step 5: Schedule SE for self-employment tax Calculated automatically in tax software from your Schedule C net profit.
Step 6: Apply the SE tax deduction Half of your self-employment tax is deductible from gross income. Software applies this automatically.
Step 7: File and pay Pay any balance via IRS Direct Pay at no cost. If you overpaid quarterly estimates, you’ll receive a refund or can apply it toward next year.
One practical note: if you’ve ever accidentally purchased personal groceries on the Instacart payment card, or if personal expenses appeared on the card by mistake, those don’t change your taxable income. Your income is still just the batch pay, tips, and bonuses, not anything related to the grocery transactions themselves.
