Instacart Shopper Taxes in California - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in California?

Yes, absolutely. As an Instacart shopper in California, the income you earn is taxable at both the federal and state levels. The IRS considers you an independent contractor, not an employee of Instacart. This means Instacart doesn’t withhold taxes from your payments. You are responsible for paying these taxes yourself.

Federal Taxes: You'll report your Instacart income on Schedule C (Profit or Loss from Business) when you file your federal income tax return (Form 1040). Schedule C allows you to deduct business expenses, reducing your taxable income. The net profit (income minus expenses) from Schedule C is then reported on your Form 1040.

California Taxes: California has a graduated income tax system, meaning the more you earn, the higher the tax rate. Your Instacart income, after federal adjustments and deductions, will be subject to California state income tax. California rates are generally higher than many other states, so accurate record-keeping and maximizing deductions are particularly important. You'll use Form 540 to file your California state income tax return. The net profit from your Schedule C will flow to your California return.

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 (verify the final official rate from the IRS – IRS Standard Mileage Rates). Keep a detailed log of all miles driven for Instacart shopping, including dates, destinations, and purpose. Apps like Stride Tax or Everlance can help with this.
• Hot Bags & Shopping Equipment: The cost of insulated bags, shopping carts, phone mounts, or any other equipment specifically used for Instacart shopping is deductible. If the item has a useful life of more than one year (like a cart), you may need to depreciate it over several years.
• Phone Expenses: You can deduct the portion of your cell phone bill that is directly related to your Instacart work. This is typically calculated based on the percentage of time you use your phone for Instacart. Keep records of your phone bill and usage.
• Software & Apps: If you use any apps or software specifically for tracking income, expenses, or mileage related to Instacart (like Stride Tax, Everlance, or accounting software), the cost of these subscriptions is deductible.

The 15.3% Self-Employment Tax Surprise

Because you're an independent contractor, you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This is called Self-Employment Tax. It totals 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings from Schedule C. However, you only pay self-employment tax on earnings over $400.

You'll calculate this on Schedule SE (Self-Employment Tax). The good news is that you can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax liability.

Closing Tip for California Residents

California's tax laws can be complex. Given the state's graduated income tax rates, it's highly recommended to keep meticulous records of all your income and expenses throughout the year. Consider using accounting software or working with a qualified tax professional, especially if your Instacart income is a significant portion of your overall income. Proactive tax planning can save you money and prevent surprises when filing time comes. Don't wait until the last minute!