Instacart Shopper Taxes in North Dakota - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in North Dakota?

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

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.

North Dakota Requirements: North Dakota has a graduated income tax system, meaning the tax rate you pay increases as your income increases. You will report your net profit from Schedule C on your North Dakota state income tax return (Form ND-1). North Dakota also allows for deductions similar to the federal level, which can reduce your taxable income. The specific tax brackets for 2024 will be available when filing in 2025, and can be found on the North Dakota Office of State Tax Commissioner website.

Top Tax Write-offs for Instacart Shoppers

As a self-employed 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 largest 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 track this.
• Smartphone & Data Plan: If you use your smartphone for Instacart (scheduling, communication, navigation), you can deduct the portion of the cost attributable to business use. If you use it 50% for Instacart, you can deduct 50% of the phone bill.
• Hot Bags & Shopping Supplies: The cost of insulated bags, reusable shopping bags specifically for Instacart, hand sanitizer, and other supplies directly related to your shopping activities are deductible.
• Software & Apps: If you use any apps or software to help manage your Instacart business (expense tracking, mileage logging, etc.), the cost of these is 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 income tax liability.

Closing Tip for North Dakota Residents

Tax laws can be complex, and it's easy to miss deductions. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software designed for freelancers or consulting with a qualified tax professional (like myself!) to ensure you're maximizing your deductions and complying with both federal and North Dakota tax regulations. The North Dakota Office of State Tax Commissioner website (www.nd.gov/tax) is a valuable resource for state-specific information. Good luck, and happy shopping!