Instacart Shopper Taxes in Virginia - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Virginia?

Yes, absolutely. Income earned as an Instacart shopper is taxable at both the federal and Virginia state levels. Because Instacart treats you as an independent contractor, not an employee, you are considered self-employed by the IRS and the Commonwealth of Virginia.

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.

Virginia Requirements: Virginia has a graduated income tax system, meaning the tax rate increases as your income increases. Your net profit from Schedule C will be included as part of your overall adjusted gross income (AGI) on your Virginia income tax return (Form 505). Virginia’s tax brackets for the 2024 tax year (filing in 2025) will determine your state income tax liability. You can find the current brackets on the Virginia Department of Taxation website: https://www.tax.virginia.gov/individuals/income-taxes. You'll also need to consider any Virginia additions or subtractions to income that might apply to your situation.

Top Tax Write-offs for Instacart Shoppers

As a self-employed Instacart shopper, you can significantly reduce your tax burden 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 of your vehicle. Keep a detailed mileage log (date, destination, business purpose, miles driven). You can use apps to help with this.
• Hot Bags & Shopping Equipment: The cost of insulated bags, shopping carts, phone mounts, or any other equipment specifically used for Instacart shopping is deductible.
• Smartphone & Data Plan (Partial): If you use your smartphone and data plan for Instacart, you can deduct the percentage of the expense attributable to business use. For example, if you use your phone 75% for Instacart, you can deduct 75% of the monthly bill.
• Software & Apps: Expenses for apps or software used to track income, mileage, or manage your Instacart business are 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 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 Virginia Residents

Tax laws can be complex, and it’s easy to miss deductions. I strongly recommend keeping meticulous records of all your Instacart income and expenses throughout the year. Consider using accounting software designed for freelancers. For personalized advice tailored to your specific financial situation, consulting with a qualified tax professional in Virginia is always a wise investment. The Virginia Department of Taxation website (https://www.tax.virginia.gov/) is also a valuable resource.