Instacart Shopper Taxes in Montana - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Montana?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and Montana state levels. Because Instacart treats you as an independent contractor, not an employee, you are 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. Instacart will send you a Form 1099-NEC detailing your earnings for the year. Keep this form with your tax records.

Montana Specific Rules: Montana has a graduated income tax system, meaning the tax rate you pay increases as your income increases. Your Instacart income, after deducting business expenses on your federal Schedule C, will be included in your Montana adjusted gross income (AGI). Montana then applies its tax brackets to determine your state income tax liability. You'll file Montana Form 2, Individual Income Tax Return, to calculate and pay your state taxes. Montana also has various credits and deductions you may be eligible for, so exploring the Montana Department of Revenue website is recommended.

Top Tax Write-offs for Instacart Shoppers

As an Instacart shopper, you can significantly reduce your tax burden by claiming eligible business expenses. Here are some key deductions:

• Mileage: This is often the largest 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, including the date, destination, and purpose. You can use apps like MileIQ or Stride Tax to help track this.
• Smartphone & Data Plan: If you use your smartphone for Instacart (which you likely do!), you can deduct the portion of your monthly bill attributable to business use. Keep records of your usage.
• Shopping Supplies: Expenses for items like insulated bags, reusable shopping bags (if required by stores), hand sanitizer, and other supplies directly related to your shopping activities are deductible.
• HotSchedules/Similar Software: If you pay for any scheduling or expense tracking software specifically used for Instacart, those fees are deductible.

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

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. The combined rate is 15.3% (12.4% for Social Security and 2.9% for Medicare) on earnings over $400.

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

Closing Tip for Montana Residents

Navigating self-employment taxes can be complex. I strongly recommend keeping meticulous records throughout the year – mileage logs, receipts, and your 1099-NEC form. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional (like myself!) to ensure you're taking all eligible deductions and complying with both federal and Montana tax laws. The Montana Department of Revenue website (https://revenue.mt.gov/) is also a valuable resource. Wishing you a profitable and tax-efficient year as an Instacart shopper in Montana!