Instacart Shopper Taxes in Washington - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Instacart Shopper income taxable in Washington?

Yes, your income as an Instacart shopper is taxable, but the specifics are a little different in Washington State. The federal government requires you to report this income, and while Washington doesn't have a state income tax, you still have federal obligations.

Federal Requirements: As an Instacart shopper, you are considered an independent contractor by the IRS. This means Instacart doesn’t withhold taxes from your payments. You’ll report your earnings and expenses on Schedule C (Profit or Loss from Business) when you file your federal income tax return (Form 1040). Schedule C calculates your net profit (income minus expenses), which is then added to your other income to determine your total taxable income.

Washington State Specifics: Washington State does not have a state income tax. Therefore, you won’t file a state income tax return based on your Instacart earnings. However, Washington does have a capital gains tax on profits exceeding $25,000. While Instacart earnings are generally considered ordinary income and not capital gains, it’s important to be aware of this tax if you have other investments or assets that generate capital gains. Consult a tax professional if your total capital gains exceed this threshold.

Top Tax Write-offs for Instacart Shoppers

As an independent contractor, you can significantly reduce your tax liability by claiming eligible business expenses. Here are some common deductions 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 shopping, including dates, destinations, and purpose. You can use apps to track this automatically.
• Hot Bags & Equipment: The cost of insulated bags, phone mounts, car chargers, and other equipment necessary for shopping can be deducted. If the item has a useful life of more than one year (like a phone mount), you'll likely need to depreciate it over several years.
• Smartphone & Data Plan (Partial): If you use your smartphone primarily for Instacart, you can deduct the percentage of your phone bill and data plan that relates to business use. Keep records to support this allocation.
• Shopping Supplies: Expenses for items like hand sanitizer, cleaning wipes, or reusable shopping bags (if you provide them to customers) are 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. The combined rate is 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings. However, you only pay self-employment tax on earnings over $400. You’ll calculate this on Schedule SE (Self-Employment Tax) and include it with your Form 1040. The good news is that you can deduct one-half of your self-employment tax from your gross income.

Closing Tip for Washington Residents

Navigating taxes as a self-employed individual can be complex. While Washington State offers the benefit of no state income tax, diligent record-keeping is crucial to maximize your federal deductions and minimize your tax liability. Consider using accounting software or consulting with a qualified tax professional to ensure you’re compliant and taking advantage of all available tax benefits. Don't wait until the last minute – start organizing your income and expenses now for a smoother tax filing experience in 2025!