Instacart Shopper Taxes in Oregon - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Oregon?

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

Oregon Specific Rules: Oregon has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your Instacart profit (after deducting business expenses on Schedule C) will be added to your other income, and then taxed according to the Oregon tax brackets for the 2024 tax year (filing in 2025). You'll use Form OR-40 to file your Oregon state income tax return. Oregon also has a standard deduction and potential itemized deductions, similar to the federal system, which can further reduce your 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 can only deduct miles driven while actively working – commuting to your first order isn’t deductible.
• Smartphone & Data Plan: If you use your smartphone for Instacart (and most shoppers do!), you can deduct the portion of your phone bill and data plan that relates to your work. If you use your phone 50% for Instacart, you can deduct 50% of the costs.
• Hot Bags & Shopping Equipment: The cost of insulated bags, carts, or other equipment you purchase specifically for Instacart shopping is deductible.
• Software & Apps: If you use any apps or software to help manage your Instacart business (e.g., mileage trackers, expense trackers), the cost of those subscriptions is 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. It's currently 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 Oregon 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 your federal and Oregon state taxes accurately. Don't hesitate to reach out if you have specific questions or need personalized advice. Good luck with your Instacart business and happy filing!