Instacart Shopper Taxes in Illinois - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Illinois?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and Illinois state levels. Because Instacart classifies you as an independent contractor (Form 1099-NEC), you are essentially self-employed. This means you're responsible for tracking your income and expenses and reporting them to the IRS and the Illinois Department of Revenue.

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). Schedule C allows you to deduct business expenses, reducing your taxable income. You'll calculate your net profit (income minus expenses) on Schedule C, and that profit is then transferred to your Form 1040.

Illinois Requirements: Illinois has a flat income tax rate of 4.95% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be included in your adjusted gross income (AGI) on your Illinois state income tax return (Form IL-1040). The flat rate applies to all levels of income, simplifying the state tax calculation. You will also need to report your federal self-employment tax on your Illinois return.

Top Tax Write-offs for Instacart Shoppers

As an Instacart shopper, you can significantly reduce your tax liability by taking advantage of eligible deductions. Here are some key write-offs:

• 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 deliveries (from leaving to pick up the order to delivering it). You can use apps or a simple notebook. You cannot include commuting miles.
• 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. Keep records of your phone bill and estimate the business usage percentage.
• 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 pay for any apps or software that help you manage your Instacart business (e.g., mileage tracking apps, expense trackers), those fees are deductible.

The 15.3% Self-Employment Tax Surprise

Many independent contractors are surprised by self-employment tax. When you're 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 – a total of 15.3% (12.4% for Social Security and 2.9% for Medicare).

You'll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on 92.35% of your net earnings from Schedule C. 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 Illinois Residents

Tax laws can be complex, and this is a general guide. I strongly recommend keeping 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 substantial or your tax situation is complicated. Proactive tax planning can save you money and stress when it's time to file. Good luck, and happy shopping!