Instacart Shopper Taxes in Indiana - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Indiana?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and Indiana state levels. Because Instacart classifies you as an independent contractor (not an employee), you're considered self-employed by the IRS and the state of Indiana. This means you're responsible for reporting your earnings and paying all applicable taxes.

Federal Requirements: 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. You’ll also need to calculate your profit (income minus expenses) on Schedule C.

Indiana Specific Rules: Indiana has a flat income tax rate for 2024. This means all taxable income is taxed at the same percentage, regardless of your income bracket. As of late 2024, the Indiana flat income tax rate is 3.15%. You will report your Schedule C profit on your Indiana state income tax return (Form 5) to calculate your Indiana income tax liability.

Top Tax Write-offs for Instacart Shoppers

As a self-employed Instacart shopper, you can significantly reduce your tax burden 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 to track this automatically.
• Hot Bags & Equipment: The cost of insulated bags, phone mounts, car chargers, and other equipment used specifically for Instacart shopping are deductible.
• Smartphone & Data Plan (Partial): If you use your smartphone and data plan for Instacart, you can deduct the percentage of the cost attributable to business use. For example, if you use your phone 75% for Instacart, you can deduct 75% of your monthly bill.
• Instacart Shopper Software/Apps: Any subscription fees or costs associated with apps or software used to manage your Instacart business (beyond the standard smartphone OS) are deductible.

Important: Keep receipts and documentation for all expenses you claim!

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%.

You'll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on your profit (after deducting business expenses on Schedule C). Also, you don’t pay self-employment tax on any earnings below $400. The 15.3% breaks down to 12.4% for Social Security and 2.9% for Medicare.

Closing Tip for Indiana Residents

Tax laws can be complex, and this guide provides general information. I strongly recommend keeping meticulous records of your income and expenses throughout the year. Consider using accounting software designed for freelancers or consulting with a qualified tax professional (like myself!) to ensure you're maximizing your deductions and complying with all federal and Indiana tax regulations. Don't hesitate to reach out if you have specific questions about your Instacart income and taxes – accurate tax preparation is key to avoiding issues with the IRS and the Indiana Department of Revenue.