Instacart Shopper Taxes in North Carolina - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in North Carolina?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and North Carolina 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 Taxes: You'll report your Instacart income on Schedule C (Profit or Loss from Business) as part of your Form 1040. This form allows you to deduct business expenses (more on that below) to arrive at your taxable profit. You'll need to track your total earnings from Instacart (as reported on Form 1099-K if you meet the reporting thresholds, or through your Instacart earnings summary if not) and all related expenses.

North Carolina Taxes: North Carolina has a flat income tax rate for 2024, currently at 4.5%. You will report your taxable income (after federal adjustments and deductions) on Form D-400, North Carolina Individual Income Tax Return. The income reported on your federal Schedule C flows directly into calculating your North Carolina taxable income.

Top Tax Write-offs for Instacart Shoppers

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

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use. Keep a detailed mileage log (date, destination, business purpose, miles driven). You can use apps to help with this. You cannot claim mileage for commuting to your first shopping location, only miles driven while actively working.
• Phone Expenses: If you use your personal phone for Instacart (which is common), you can deduct the percentage of the phone bill attributable to business use. For example, if you use your phone 60% of the time for Instacart, you can deduct 60% of your monthly bill.
• Hot Bags & Shopping Equipment: The cost of insulated bags, shopping carts, or other equipment specifically used for Instacart shopping is deductible. If the item has a useful life of more than one year (like a cart), you may need to depreciate it over several years.
• Software & Apps: If you pay for any apps or software that help you manage your Instacart business (e.g., mileage tracking apps, expense trackers), those fees 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. The combined rate is 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You'll calculate this on Schedule SE (Self-Employment Tax).

The good news is you only pay self-employment tax on your profit (income minus expenses). Also, you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Remember, self-employment tax applies to earnings over $400.

Closing Tip for North Carolina 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 working with a qualified tax professional (like myself!) to ensure you're taking all the deductions you're entitled to and filing accurately. Don't hesitate to reach out if you have specific questions about your Instacart income and North Carolina taxes. Proper planning can save you significant money and stress during tax season!