Instacart Shopper Taxes in Arkansas - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Arkansas?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and Arkansas state levels. Because Instacart treats you as an independent contractor, not an employee, you are considered self-employed by the IRS and the state of Arkansas.

Federal Requirements: You'll report your Instacart earnings on Schedule C (Profit or Loss from Business) when you file your federal income tax return (Form 1040). This form allows you to deduct business expenses, ultimately determining your taxable profit. Keep detailed records of all income received from Instacart (typically found in your Instacart earnings summary).

Arkansas Requirements: Arkansas has a graduated income tax system, meaning the tax rate you pay increases as your income increases. You will report your federal adjusted gross income (AGI) on Form AR1000, Arkansas Individual Income Tax Return. The profit calculated on your federal Schedule C will flow to your Arkansas return and be subject to Arkansas income tax rates based on your filing status and total income. As of late 2024, the rates range from 0% to 5.9% depending on your income bracket. You can find the current Arkansas tax brackets and rates on the Arkansas Department of Finance and Administration website: https://www.arkansas.gov/departments/finance-administration/taxation

Top Tax Write-offs for Instacart Shoppers

As a self-employed Instacart shopper, you can significantly reduce your tax liability by claiming eligible business deductions. Here are some key write-offs:

• Mileage: This is often the largest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use of your vehicle. Keep a detailed mileage log (date, destination, business purpose, miles driven). You can use apps to help track this. You cannot claim mileage for commuting to your first shopping location, only miles driven while actively working (picking up orders, delivering orders).
• Phone Expenses: If you use your personal phone for Instacart (which is common), you can deduct the percentage of the phone bill attributable to business use. For example, if you use your phone 75% for Instacart, you can deduct 75% of your monthly bill.
• Hot Bags & Shopping Supplies: The cost of insulated bags, reusable shopping bags specifically for Instacart, hand sanitizer, and other supplies directly related to your shopping activities are deductible.
• Software & Apps: If you use any apps or software to help manage your Instacart business (mileage trackers, expense trackers, etc.), the cost of these subscriptions is deductible.

The 15.3% Self-Employment Tax Surprise

Being self-employed means you're responsible for both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and is currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You'll calculate this on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on profits over $400. The good news is you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Closing Tip for Arkansas Residents

Tax laws can be complex, and this guide provides general information. It's highly recommended to keep meticulous records of all your income and expenses throughout the year. Consider using accounting software or a spreadsheet to stay organized. If you're unsure about any aspect of your taxes, or if your situation is particularly complex, consulting with a qualified tax professional in Arkansas is always a wise investment. They can help you maximize your deductions and ensure you're compliant with both federal and state tax laws.