Instacart Shopper Taxes in Nebraska - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Nebraska?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and Nebraska 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 Nebraska.

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 calculates your net profit – your earnings minus your business expenses. Only the net profit is subject to income tax.

Nebraska Specific Rules: Nebraska has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your Instacart net profit will be added to your other income (from a W-2 job, for example) to determine your total taxable income for Nebraska. You’ll use Nebraska Form 1040N to calculate your Nebraska income tax liability based on the current year’s tax brackets. It's crucial to accurately report your income to avoid penalties.

Top Tax Write-offs for Instacart Shoppers

As a self-employed Instacart shopper, you can significantly reduce your tax burden by claiming legitimate business expenses. Here are some key deductions:

• 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 shopping (from leaving to pick up the order, to delivery, and returning). You can use apps to track this automatically.
• Phone Expenses: You likely use your phone for accepting orders, navigating, and communicating with customers. You can deduct the percentage of your phone bill that relates to business use. If you use your phone exclusively for Instacart, you can deduct the entire bill.
• Hot Bags & Shopping Equipment: The cost of insulated bags, shopping carts, or other equipment specifically used for Instacart shopping is deductible.
• Software & App Fees: Any fees you pay for apps or software that help you manage your Instacart business (e.g., mileage tracking apps, expense trackers) are deductible.

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

The 15.3% Self-Employment Tax Surprise

Many independent contractors are surprised to learn about 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%. This is calculated on Schedule SE (Self-Employment Tax).

However, you only pay self-employment tax on your net earnings over $400. You also get to deduct one-half of your self-employment tax from your adjusted gross income (AGI) on Form 1040, which can lower your overall income tax liability.

Closing Tip for Nebraska Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional, especially in Nebraska with its graduated income tax system. Proper planning and accurate record-keeping throughout the year will make filing your taxes much smoother and potentially save you money. Good luck, and happy shopping!