Instacart Shopper Taxes in New Mexico - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in New Mexico?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and New Mexico 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). This form allows you to deduct business expenses, reducing your taxable income. The net profit (income minus expenses) from Schedule C is then reported on your Form 1040.

New Mexico Requirements: New Mexico has a graduated income tax system, meaning the tax rate you pay increases as your income increases. You will report your federal adjusted gross income (AGI) on Form W-44 (New Mexico Individual Income Tax Return) and calculate your New Mexico tax liability based on the applicable tax brackets for the 2024 tax year. The net profit calculated on your federal Schedule C will directly impact your New Mexico taxable income.

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 common deductions:

• 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 log of all miles driven for Instacart deliveries (from leaving to pick up the order to delivering it to the customer). You can also deduct parking fees and tolls.
• Smartphone & Data Plan: If you use your smartphone for Instacart (scheduling, communication, navigation), you can deduct the portion of your monthly bill attributable to business use. Keep records of your usage.
• Hot Bags & Shopping Equipment: The cost of insulated bags, carts, or other equipment specifically used for Instacart shopping is deductible.
• Software & Apps: If you use any apps or software specifically for tracking income, expenses, or optimizing your Instacart work, those costs are deductible.

Important: Keep receipts and detailed records for all expenses you plan to deduct!

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. It totals 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings from Schedule C. However, you only pay this tax on earnings over $400.

You'll calculate this on Schedule SE (Self-Employment Tax). 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 New Mexico 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 given New Mexico's graduated income tax system. Proper planning and record-keeping throughout the year will make filing your taxes in 2025 much smoother and potentially save you money. The New Mexico Taxation and Revenue Department website (https://www.tax.newmexico.gov/) is a valuable resource for state-specific tax information.