Instacart Shopper Taxes in Alaska - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Alaska?

Yes, your income as an Instacart shopper is taxable, but the situation is simpler in Alaska than in most other states. The federal government requires anyone earning $400 or more as an independent contractor to file a tax return and pay self-employment taxes. You will report your Instacart earnings on Schedule C (Profit or Loss From Business) as part of your Form 1040. This schedule allows you to deduct business expenses, reducing your taxable income.

Alaska-Specific Rule: Alaska has no state income tax. This means you won't file a state income tax return, and you won't owe any income tax to the State of Alaska on your Instacart earnings. However, you are still responsible for federal income and self-employment taxes.

Top Tax Write-offs for Instacart Shoppers

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use. Keep a detailed log of all miles driven for Instacart shopping and deliveries (from leaving home to returning home, specifically for work). You can use an app or a simple notebook.
• Phone Expenses: If you use your personal cell phone for Instacart (scheduling, communication with customers, using the app), you can deduct the percentage of the phone expense that relates to your work. Keep records of your phone bill.
• Hot Bags & Shopping Equipment: The cost of insulated bags, carts, or other equipment you purchase specifically for Instacart shopping is deductible.
• Software & App Fees: Any fees Instacart charges you, or the cost of any tax preparation software you use specifically for your Instacart business, are deductible.

The 15.3% Self-Employment Tax Surprise

Many independent contractors are surprised by self-employment tax. As an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both the employer and employee portions, totaling 15.3%. This is calculated on Schedule SE (Self-Employment Tax). You'll calculate your net earnings subject to self-employment tax using the profit from your Schedule C. The good news is you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which reduces your overall income tax liability.

Closing Tip for Alaska Residents

As an Alaska resident, you benefit from not having state income tax, but diligent record-keeping is crucial for maximizing your federal deductions. Keep detailed logs of your mileage, expenses, and income throughout the year. Consider using accounting software or consulting with a tax professional to ensure you're taking advantage of all eligible deductions and complying with all federal tax laws. Filing accurately and on time will help you avoid penalties and ensure a smooth tax season!