If you shop and deliver for Instacart as a full-service shopper, you are an independent contractor. That means Instacart does not withhold taxes from your earnings, and come tax time, you are responsible for reporting your income and claiming your own deductions.
The good news is that the IRS allows self-employed shoppers to deduct a wide range of business expenses, and the nature of the work means your deduction list goes beyond just mileage. Every mile you drive, every insulated bag you buy, every dollar you spend on your phone plan to run the Instacart app counts toward reducing your tax bill.
This guide covers every legitimate deduction available to Instacart full-service shoppers, organized by category, so nothing gets missed at tax time.
Work mileage
Mileage is typically the largest deduction available to full-service Instacart shoppers. Every batch involves driving, from your starting point to the store, through the parking lot and back out, and then to each customer's address. Those miles add up across a full week of shopping.
You have two options for deducting vehicle costs: the standard mileage rate or actual vehicle expenses. You must choose one method and stick with it for the full tax year for that vehicle.
Most shoppers benefit more from the standard mileage rate, but your situation depends on your vehicle costs and how many miles you put in.
Instacart does not provide a reliable mileage report for tax purposes. Tracking your own mileage independently throughout the year is the only way to make sure you are capturing your full deduction.
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Driving to the store
Miles driven from where you accept a batch to the grocery store are deductible business miles. This leg of every batch is yours to track, and Instacart does not capture it for you.
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Driving between stores on a multi-store batch
Some batches require stops at more than one store. Every mile driven between stores as part of completing that batch is a deductible business mile. Log each leg separately to keep your records clean.
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Driving to deliver to customers
Miles from the store to each customer's delivery address are fully deductible. For batches with multiple customers, every leg of the delivery route counts.
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Driving to a better shopping zone
If you drive to a different area to access higher-paying batches or a busier store zone while the app is active, those miles are deductible. The purpose is business, positioning yourself where the work is.
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Driving to a vehicle service appointment
Miles to and from the mechanic or service center for maintenance on your delivery vehicle are deductible at your business-use percentage. Log the trip and keep the service receipt.
Vehicle expenses
If you opt out of the standard mileage rate, you can deduct your actual vehicle costs instead. Shopping for Instacart puts real wear on your car, from parking lot stops to loaded trunk weight on every delivery. Under the actual expense method, those costs become deductible at your business-use percentage.
If 60% of your total miles for the year were for Instacart, you deduct 60% of each qualifying vehicle expense. You cannot use both methods for the same vehicle in the same year, so choose the one that works better for your situation.
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Gas
Deduct the business-use percentage of your annual fuel costs. Save receipts throughout the year or use a fuel tracking app. For shoppers doing multiple batches per day, fuel costs can be a significant expense worth documenting carefully.
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Car insurance
Auto insurance premiums are deductible at your business-use percentage under the actual expense method. If you carry additional coverage for delivery driving, that portion may be fully deductible. Standard mileage rate filers cannot deduct insurance separately.
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Repairs and maintenance
Oil changes, new tires, brake work, and other maintenance are deductible at your business-use percentage. Carrying heavy grocery loads regularly adds wear to your suspension and tires faster than typical personal use. Keep all service receipts. These are already factored into the standard mileage rate and cannot be deducted separately under that method.
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Depreciation
Under the actual expense method, you can deduct a portion of your vehicle's depreciation each year at your business-use percentage. Depreciation calculations depend on when the vehicle was placed in service and other factors. A tax professional can help you get this right.
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Car cleaning
Grocery deliveries can be messy. Spills, produce residue, and general trunk wear make regular cleaning a practical necessity for Instacart shoppers. Car washes are deductible at your business-use percentage under the actual expense method.
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Registration and fees
Annual vehicle registration fees and state or local fees tied to your vehicle are deductible at your business-use percentage under the actual expense method.
Phone and shopper equipment
The Instacart app drives every step of the shopping process, from batch selection to item scanning to customer communication. Your phone is not a convenience, it is the tool your entire business runs on. The equipment you use to shop and deliver efficiently is equally legitimate as a business expense, and these deductions apply regardless of which vehicle expense method you use.
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Phone and data plan
The Instacart app requires a reliable phone and data connection at all times. Deduct the business-use percentage of your monthly phone bill and device cost. If you use your phone 70% for Instacart shopping and 30% personally, 70% of each cost is deductible. Keep your estimate consistent and documentable.
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Insulated bags and coolers
Keeping cold and frozen items at the right temperature during transit is part of doing the job correctly. Insulated bags, soft coolers, and similar equipment purchased for your Instacart work are fully deductible. If Instacart reimbursed you for any of these, you cannot also deduct that amount.
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Reusable shopping bags
Reusable bags purchased specifically for your Instacart shopping are deductible. Some stores charge for bags, and using your own is both practical and a trackable business expense.
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Phone mount and car charger
A mount and charger keep your phone powered and accessible while driving between stores and deliveries. Both are deductible business accessories for full-service shoppers.
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Gloves and handling gear
Protective gloves or other handling gear purchased specifically for your shopping work are deductible. These are small expenses but easy to document and fully legitimate as ordinary business costs.
Parking & tolls
Parking and tolls incurred while shopping or delivering are deductible regardless of which vehicle expense method you use. Grocery store parking is usually free, but paid lots, street meters, and tolls on delivery routes all add up and qualify as deductible business expenses.
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Parking fees
Any parking fees paid at stores or during deliveries are fully deductible. This includes metered street parking and paid lots near stores or customer addresses. Save receipts or screenshots as documentation.
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Tolls
Tolls paid on routes taken during active batches are fully deductible. If you use an electronic toll account, your statements serve as documentation. Only deduct tolls you paid out of pocket that were not reimbursed.
Health and retirement benefits for Instacart shoppers
Full-service Instacart shoppers receive no employer benefits. No health coverage, no retirement matching, no paid time off. That's the tradeoff of independent contractor status. What the IRS does offer is a set of above-the-line deductions that help offset those costs, and most shoppers never take full advantage of them.
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Health insurance premiums
If you pay for your own health, dental, or vision insurance and are not eligible for coverage through a spouse's employer, you may be able to deduct those premiums in full. This is an above-the-line deduction, available even without itemizing, and it can significantly reduce your taxable income if you're covering your own plan.
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Retirement account contributions
A SEP-IRA, Solo 401(k), or SIMPLE IRA lets you put away a meaningful portion of your earnings before taxes. There's no employer match in gig work, but the contribution limits for self-employed workers are generous. Every dollar you contribute reduces your taxable income dollar-for-dollar.
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Self-employment tax deduction
As a full-service shopper, you pay both the employee and employer sides of Social Security and Medicare taxes. The IRS lets you deduct half of that self-employment tax straight from your gross income. It applies above the line, so you get it regardless of whether you itemize.
General Instacart business expenses
Running your Instacart business involves more than shopping and driving. The costs of staying organized, filing accurately, and protecting yourself on the road are all deductible and worth tracking throughout the year.
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Business app subscriptions
Mileage tracking apps, expense management software, and any other paid subscription used specifically to manage your Instacart business are deductible. Keep a clear record of which subscriptions serve your business and what you pay for each.
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Tax preparation fees
The cost of tax software or a CPA to handle your Schedule C and self-employment taxes is deductible. Gig worker tax returns are more complex than a standard W-2 filing, and the preparation cost is a legitimate business expense.
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Bank and payment fees
Fees from a dedicated business bank account or costs tied to receiving your Instacart earnings are deductible. Monthly maintenance charges and transfer fees tied directly to your gig income qualify.
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Roadside assistance membership
A breakdown between the store and a customer's home is a direct business disruption. A roadside assistance plan purchased to support your delivery driving is deductible at your business-use percentage.
What Instacart shoppers can not deduct
These are the expenses Instacart shoppers most commonly try to claim that do not hold up under IRS scrutiny:
| Expense |
Why it doesn't qualify |
| Groceries for yourself |
Food you purchase for personal consumption while shopping a batch is a personal expense. The customer's groceries passing through your hands do not make your own food deductible. |
| Commute miles |
Miles driven from home to the first store of the day are personal commute miles and are not deductible. |
| Regular clothing |
Comfortable shoes and casual clothes worn while shopping do not qualify as a uniform and are not deductible. |
| Reimbursed expenses |
Any cost Instacart covered or reimbursed cannot also be claimed as a deduction. |
| Fines and tickets |
Parking tickets and traffic fines received while on a batch are not deductible, even if incurred during active work. |
Instacart Shopper Tax FAQ
Does Instacart send a 1099?
Yes. Full-service shoppers who earn $600 or more in a calendar year will receive a 1099-NEC from Instacart. You are required to report all income regardless of whether you receive a form, and even if you earned less than $600.
Does Instacart track my mileage for me?
No. Instacart does not provide a reliable mileage summary for tax purposes. You are responsible for tracking every business mile you drive, including trips to the store, between stores, and to each delivery address. An automatic mileage tracking app like Everlance is the most reliable way to stay on top of this throughout the year.
Do Instacart shoppers have to pay quarterly taxes?
If you expect to owe more than $1,000 in federal taxes for the year, the IRS requires quarterly estimated payments. Instacart withholds nothing from your earnings, so planning ahead is essential. Everlance can help you estimate what you owe based on your income and deductions throughout the year.
Can I deduct the cost of bags Instacart charges at checkout?
If you pay for bags out of pocket at checkout and are not reimbursed by Instacart or the customer, those costs may be deductible as an ordinary business expense. Keep your receipts and track these separately. If Instacart or the customer reimbursed the cost, it does not qualify.
Do I need to keep receipts for all my deductions?
Yes. Every deduction you claim needs documentation to back it up. For mileage, the IRS requires a contemporaneous log with dates, destinations, and business purpose. For equipment and other expenses, keep digital or physical receipts. An app that handles both automatically keeps you audit-ready without extra effort.
Everlance is built for gig workers like Instacart shoppers. It automatically tracks every mile in the background, makes it easy to log expenses on the go, and generates IRS-compliant reports when tax time comes. Start for free and make sure every batch you completed is working for you at tax time.
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