Instacart Shopper Taxes in Tennessee - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Tennessee?

Yes, your income as an Instacart shopper is taxable at the federal level. The IRS considers you a self-employed individual, meaning you operate as an independent contractor, not an employee. 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 is where you’ll detail your income and expenses related to your Instacart work.

Fortunately, Tennessee is one of the few states with no state income tax. This means you won’t owe income tax to the state of Tennessee on your Instacart earnings. However, you are still responsible for federal income and self-employment taxes.

Top Tax Write-offs for Instacart Shoppers

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use. Keep a detailed log of all miles driven for Instacart deliveries (from leaving to pick up the order to delivering it). Apps like Stride Tax or Everlance can help with this.
• Phone Expenses: You likely use your phone for accepting batches, navigating, and communicating with customers. You can deduct the percentage of your phone bill that relates to your Instacart work. If you use your phone exclusively for Instacart, you can deduct the entire bill.
• Hot Bags & Shopping Supplies: The cost of insulated bags, reusable shopping bags specifically for Instacart, hand sanitizer, and other supplies directly related to fulfilling orders are deductible.
• Software & App Fees: Any fees Instacart charges you, or the cost of tax preparation software used specifically for your Instacart business, are deductible expenses.

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and is 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). You only pay self-employment tax on profits over $400. The good news is you can deduct one-half of your self-employment tax from your adjusted gross income, which can lower your overall tax liability.

Closing Tip for Tennessee Residents

As a Tennessee resident, you benefit from not having state income tax. However, diligent record-keeping is crucial to maximize your deductions and minimize your federal tax bill. Consider using accounting software or a tax app designed for independent contractors. Don't hesitate to consult with a qualified tax professional if you have specific questions or a complex tax situation. Proactive tax planning can save you money and stress during filing season!