Instacart Shopper Taxes in New Jersey - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in New Jersey?

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

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 allows you to deduct business expenses, ultimately determining your net profit (or loss). It’s crucial to keep accurate records of all income and expenses.

New Jersey Requirements: New Jersey has a graduated income tax system, meaning the tax rate increases as your income increases. Your Instacart net profit (after Schedule C deductions) will be added to your other income, and taxed according to the applicable New Jersey tax brackets for the 2024 tax year (filing in 2025). You’ll report this income on Form NJ-1040. New Jersey also has a deduction for the federal taxes paid, which can help reduce your state tax liability. Be sure to consult the current New Jersey tax tables and instructions when filing.

Top Tax Write-offs for Instacart Shoppers

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

• Mileage: This is often the largest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use of your vehicle. Keep a detailed mileage log (date, destination, business purpose, miles driven). You can use apps to help with this. You cannot use actual expenses (gas, oil, repairs) if you claim the standard mileage rate.
• Phone Expenses: If you use your personal phone for Instacart work (scheduling, communication with customers, using the app), you can deduct the percentage of the phone bill attributable to business use.
• Hot Bags & Shopping Equipment: The cost of insulated bags, carts, or other equipment specifically used for Instacart shopping is deductible.
• Software & App Fees: Any fees paid for tax preparation software or other software directly related to managing your Instacart business 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%. This is calculated on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on profits over $400. The good news is that you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which reduces your overall tax liability.

Closing Tip for New Jersey Residents

Navigating self-employment taxes can be complex. I strongly recommend keeping meticulous records of all income and expenses throughout the year. Consider using accounting software or a spreadsheet to track everything. Don't hesitate to consult with a qualified tax professional (like myself!) in New Jersey to ensure you're taking advantage of all available deductions and complying with all state and federal tax laws. Proper planning can save you significant money and stress during tax season.