An In-Depth Guide to Instacart Taxes

You might be wondering, “Is Instacart a 1099 job?” The short answer is yes. Per the IRS, you are considered an independent contractor if you work for Instacart, and you should receive an Instacart 1099 form in the mail. You will need to pay taxes on your income working for Instacart.

Instacart only takes out taxes for W-2 employees. So if you’re a full-service Instacart worker, you are responsible for reporting any income you make through Instacart and paying taxes on that income, along with the self-employment tax.

You must be wondering how to file taxes for Instacart if you work for them. Filing taxes with Instacart can be tricky. There are different requirements depending on whether you're an in-store or full-service worker. So if you’re looking for an answer to the question “Do I need to file taxes for Instacart?” Yes, you do, and you're in the right place to learn how Instacart taxes work and how to file taxes with Instacart.

Since you’re considered an independent contractor by the IRS, you are responsible for paying your taxes. Typically, when you work for an employer on a payroll, your employer will withhold your taxes. As a self-employed individual, you’re considered the “employer” and “employee” and are responsible for paying the full amount on your own. You’re also responsible for paying taxes on any income you make working for Instacart or other delivery driver gigs such as Doordash, Grubhub, Uber, or Lyft. The self-employment tax rate is 15.3%, with 12.4% going towards Social Security taxes and 2.9% going towards Medicare taxes. If you’re a W-2 employee, you only have to pay 7.65% of this tax as your employer takes care of the rest. If you're an Instacart shopper or self-employed, you've got something extra to deal with– estimated quarterly taxes. As an independent contractor, taxes don't get taken out of your pay, so you're on the hook for making quarterly payments based on your estimated yearly income. Skip those payments when you owe more than $1,000 for the year, and you'll get hit with late payment penalties from the IRS. So, to stay on top of things, crunch those numbers, figure out what you owe, and make sure you pay up by these deadlines:

• Q1:April 15
• Q2:June 15
• Q3:September 15
• Q4:January 15 of the following year

With Instacart, the pay structure varies, and you could be paid per item, per mileage, with base pay and through tips from customers. There’s no clear answer to how much you can make with Instacart. Typically, if you shop and deliver for Instacart, you will make at least $10 per order.

You’ll use Schedule C to determine the amount of money you’re taxed on and include any income you’ve made with Instacart as well as any deductions. You’ll use Schedule SE to determine the amount of self-employment tax you owe. You’ll use Form 1040 to file your normal tax return. You’ll attach both Schedules to this form when you file.

If you work for Instacart as a delivery driver and shopper, one question arises, how do I get my 1099 from Instacart? If you’ve earned $600 or more during the tax year, you will receive an email with a 1099-NEC from Instacart as an Instacart tax form. If you don’t receive an email with your Instacart 1099, check your spam or junk folder and ensure the email address on your Instacart account matches your primary email address. You can also choose to receive an Instacart 1099 form as a paper copy in the mail.

Instacart used to use a platform called Stripe Express which allowed you to view your earnings, review your tax information and download tax forms, including 1099 Instacart tax forms. However, from the 2024 tax year, shoppers will receive the form directly from Instacart. If you didn’t get your form, reach out to their support team.

You’ll need this Instacart tax document when it comes time to file your taxes. When you work as a shopper and driver for Instacart, the IRS considers you an independent contractor. Instacart will send you this form if you earn $600 or more for the tax year.

You can catch a break by taking certain Instacart tax deductions to lower your gross annual income. As an Instacart driver, you need your car to make your deliveries. It’s important to keep track of all the miles you drive for Instacart since you can deduct the miles you drive. You have two options when it comes to claiming the mileage deduction:

• Standard mileage method: You can take the standard deduction, which is a fixed rate and multiply it by the number of miles driven. The rate for the 2024 tax year is $0.67. You can deduct tolls and parking fees but can’t deduct any other car-related expenses with the option.
• Actual expenses deduction: You can deduct the actual expenses for the cost of upkeeping and maintaining your vehicle. This route is a bit complicated, so it’s best to use the actual expenses deduction under the guidance of a tax expert. You can use the car mileage tax calculator to help you calculate the number of miles you’ve driven by the standard rate. Other car-related expenses you can deduct are gas, car maintenance, insurance, registration and vehicle depreciation.

A cell phone is a crucial part of your job with Instacart. If you have a separate cell phone for Instacart purposes, you can deduct the cost of the cell phone and your monthly cell phone bill. If you use a personal cell phone, you can only deduct the amount used for business. The groceries you deliver might need to stay hot or cold during transport. You can write off any coolers or insulated bags you might need to transport the groceries. If Instacart charges any commission fees, you can write those off too.