Instacart Shopper Taxes in Texas - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Texas?

Yes, your income as an Instacart shopper is taxable at the federal level. Because you are considered an independent contractor, not an employee, the IRS requires you to report your earnings and pay taxes on those earnings. You'll report your Instacart income 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 reducing your taxable income.

Good news for Texas residents! Texas does not have a state income tax. This means you won't need to file a state income tax return or pay state income tax on your Instacart earnings. However, your federal tax obligations still apply.

Top Tax Write-offs for Instacart Shoppers

• Mileage: This is often the biggest deduction for Instacart shoppers. 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 to the customer, and returning home. Apps like Stride Tax or Everlance can help with this.
• Phone Expenses: You likely use your phone for communication, navigation, and the Instacart app. You can deduct the percentage of your phone bill that relates to your Instacart work. If you use your phone 75% for Instacart, you can deduct 75% of the bill.
• Hot Bags & Shopping Equipment: The cost of insulated bags, shopping carts, or other equipment specifically used for Instacart shopping is deductible. These are considered business expenses.
• Software & App Fees: Any fees Instacart charges you, or the cost of tax preparation software used specifically for your Instacart business, are deductible.

The 15.3% Self-Employment Tax Surprise

As 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 totals 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings (income after deductions) exceeding $400. You'll calculate this on Schedule SE (Self-Employment Tax) and include it with your Form 1040. Don't be alarmed by this amount – it's essentially the equivalent of what an employer would normally pay on your behalf.

Closing Tip for Texas Residents

While you benefit from no state income tax in Texas, diligent record-keeping is crucial for maximizing your federal tax deductions as an Instacart shopper. Consider using accounting software or a dedicated app to track your mileage and expenses throughout the year. Don't hesitate to consult with a qualified tax professional if you have specific questions or complex tax situations. Filing accurately and taking advantage of all eligible deductions will ensure you pay only what you owe and avoid potential penalties.