Instacart Shopper Taxes in New York - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in New York?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and New York State levels. As an independent contractor, Instacart does not withhold taxes from your payments. This means you are responsible for paying both income tax and self-employment tax on your earnings.

Federal Taxes: You'll report your Instacart income on Schedule C (Profit or Loss from Business) as part of your Form 1040. Schedule C allows you to deduct business expenses (more on that below), reducing your taxable income. The profit (income minus expenses) from Schedule C is then reported on your Form 1040.

New York State Taxes: New York has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Instacart profit (after Schedule C deductions) will be added to your other income, and your New York State tax liability will be calculated based on the applicable tax brackets for the 2024 tax year (filing in 2025). You'll use Form IT-1040 to file your New York State income tax return. New York also has a separate filing requirement for self-employment tax (see below).

Top Tax Write-offs for Instacart Shoppers

Keeping accurate records of your expenses is crucial! Here are some common deductions Instacart shoppers in New York can take:

• Mileage: This is a big one! The 2024 federal standard mileage rate is 67 cents per mile for business use. You can deduct the miles you drive specifically for Instacart shopping – from accepting an order to delivering it. Keep a detailed mileage log (date, destination, miles driven, purpose).
• Phone Expenses: If you use your personal phone for Instacart (which is likely!), you can deduct the percentage of the phone bill that relates to your business use. For example, if you estimate 70% of your phone use is for Instacart, you can deduct 70% of your monthly bill.
• Hot Bags & Shopping Equipment: The cost of insulated bags, shopping carts, or other equipment you purchase specifically for Instacart 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.

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, and it's currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You only pay self-employment tax on profits over $400.

You'll calculate this on Schedule SE (Self-Employment Tax). The good news is that half of your self-employment tax is deductible from your gross income on Form 1040, which helps reduce your overall tax liability. New York State also has a separate self-employment tax form (IT-176) that you will need to complete.

Closing Tip for New York Residents

Tax laws can be complex, and this is a general guide. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software or a spreadsheet to stay organized. If you're unsure about any aspect of your taxes, or if your situation is particularly complex, consulting with a qualified tax professional (like myself!) is always a wise investment. Don't hesitate to reach out for personalized advice to ensure you're maximizing your deductions and complying with all applicable laws in New York.