Being a Shipt Shopper or Driver gives you the ultimate flexibility: you choose when and where you work while helping people get their groceries and essentials. But with that freedom comes responsibility. Since you’re an independent contractor, you’re essentially running your own business. That means you’re in charge of tracking your income, managing expenses, and staying compliant with IRS tax rules.
Navigating self-employment taxes doesn’t have to be complicated. In this guide, we’ll break down everything you need to know about Shipt earnings, deductible expenses, tax filing, and how to stay organized. Plus, we’ve got an exclusive discount for Shipt Shoppers on Everlance to help simplify tracking your miles and expenses....because let’s be honest, who doesn’t love putting their finances on autopilot?
Shipt Shoppers earn money through three main sources:
Your total earnings depend on factors like order volume, location, efficiency, and customer tips.
Shipt has some great FAQs to help with any questions you may have. You can find those here Shipt Shopper FAQ | Is Shopping with Shipt Worth It?. Shoppers are paid per order and also have the opportunity to earn tips and bonuses as applicable. Pay comes each Friday through direct deposit.
Pretty good gig right? One thing to keep in mind here, since you’re an independent contractor you aren’t having taxes taken out of your check, like working a W2 might lead to. So if you make $100 on the Shipt platform, after any applicable fees, your deposit will be $100 and you are responsible for taxes required by the IRS. (We’ve got you covered here: The Ultimate Guide to Self-Employed Taxes | Everlance)
Shipt pays its shoppers through weekly direct deposits, every Friday. If you need quicker access to your funds, Shipt also offers Instant Pay, allowing you to cash out your earnings immediately for a small fee.
What Affects Your Pay?
Being a Shipt shopper comes with some great Shopper Perks! As you set yourself up for success, don’t leave money on the table by not leveraging discounts that may be available to you.
As a Shipt Shopper, you will need to report all of your income on your tax return. Make sure to keep track of all the money you earn from Shipt, including tips and bonuses. Within your Shopper app, you’ll have access to all of your earnings. Shipt will also provide a 1099 form reporting your income at the end of the year, if you meet a certain threshold.
If Shipt is your only source of income, this should be plenty, though it never hurts to track on your own). If you have multiple sources of income, whether it be additional apps, a night job, a day job, a day and night job, whatever the situation may be, it’s essential to keep this tracked on your own so you can report at the end of the year. This can be a simple spreadsheet or an app that does it all for you(*cough* *cough* we know one Everlance for Shipt Shoppers
It’s critical that you keep a record of all your expenses related to your work as a Shipt Shopper. This includes things like supplies, equipment(such as your phone), bills, software costs, commission fees, anything that you are paying for to help run your business. You can find some more examples here: 9 Best Tax Deductions for Shipt Drivers| Everlance
Why is this critical? The IRS understands it costs money to run a business, so they don’t tax just your revenue, they tax your profit. In arguably way way too simple terms: If you have $1000 in income, $0 in expenses…your profits are $1000, and that’s what you’re paying taxes on. If you have $1000 in income, $500 in expenses, your profits are $500, and you’re paying taxes on that.
Now, the old way of doing this used to be keeping a shoebox of receipts and adding them all up at the end of the year. Thankfully, with tools like Everlance, we’ve moved beyond that. All you have to do is link a bank account or credit card, swipe the expense for work or personal, and go about your way.
Technically, yes, mileage is an expense for independent contractors..so some might argue is falls into the category above. Sure, but being the most missed tax deduction among self-employed individuals, and for many, the most valuable (Every mile you drive for work is worth 65.5 cents in deductions. So, drive 1000 miles, write off $655).
The IRS has very specific requirements to log your work trips, so it’s important to log them correctly. They need date, destination, purpose, start, stop, and total mileage. For one-off trips? Sure, not bad..but if you’re doing multiple trips a day, this becomes cumbersome. Thankfully there are many GPS-based mileage trackers that will help you out with this, including Everlance. Everlance runs in the background and allows you to track each trip individually, and simply swipe for work or personal, or set up a work session to record all trips during certain hours for work purposes.
One of the main decisions that Shipt shoppers must make is whether to use the standard mileage rate or to itemize their expenses. The standard mileage rate is a set rate for each mile driven for business purposes(the 65.5 cents above).
In contrast, itemizing expenses involves keeping track of all the expenses related to the business, such as gas, maintenance, and repairs, and deducting them individually. While the majority of workers opt for the standard mileage deduction, the decision to use the standard mileage rate or to itemize expenses depends on a number of factors, including the number of miles driven for business purposes and the total amount of expenses incurred. It's important for Shipt shoppers to consult with a tax professional to determine the best approach for their individual circumstances.
The first tax season for many Shipt Shoppers can be rough. As we covered, taxes aren’t coming out of your paycheck, which means they’re not being paid until it’s time to file. This can come as a shock to many, who have not been setting aside money to prepare. Taxes that may be applicable include federal income tax, self-employment tax, and state and local taxes.
One approach is to estimate the percentage of their earnings that will go towards taxes based on their tax bracket and applicable tax rates and set that amount aside from each payment received. Another option is to use the previous year's tax return as a guide to estimate their tax liability for the current year.
Shipt shoppers can also make estimated tax payments to the IRS throughout the year to further reduce the amount owed at tax time. The IRS requires estimated tax payments if a taxpayer expects to owe more than $1,000 in taxes for the year.
It's important for Shipt shoppers to keep detailed records of their income and expenses to accurately calculate their tax liability and to consult with a tax professional for personalized advice on tax planning and compliance. Stop wondering how to track mileage for taxes, and use an app like Everlance to simplify the process.
There are several options available to you for filing your taxes, including doing it yourself, using tax software, hiring a tax professional, or utilizing a tax preparation service.
If you have a simple tax situation with few deductions and no significant changes to your income, you may be able to file your taxes on your own using tax software or by using the IRS Free File program. This option is generally the most cost-effective, but it may not be the best choice if you are unsure about tax rules and regulations.
Another option is to use tax software such as TurboTax or H&R Block, which guides you through the tax filing process and helps you identify potential deductions and credits. These programs can be a good choice for Shipt shoppers with more complex tax situations or those who want extra support and guidance.
Don’t be surprised by sticker shock! When using a tax software, you’ll mostly likely find that self employed taxes come at a higher cost than what you see in advertisements that are meant for Simple returns (Think a return with only W-2 income, 1 state, standard deduction).
Alternatively, you can hire a tax professional such as a Certified Public Accountant (CPA) or Enrolled Agent (EA) to file your taxes for you. A tax professional can help ensure that you are taking advantage of all the deductions and credits available to you and can answer any questions you have about your tax situation. While this option is more expensive than doing it yourself or using tax software, it can provide added peace of mind and may save you money in the long run.
Finally, tax preparation services such as Jackson Hewitt or H&R Block offer in-person assistance with filing your taxes. These services can be a good choice for Shipt shoppers who prefer face-to-face interaction and may need help with more complex tax situations.
Ultimately, it’s your decision how you best want to proceed, but we recommend at least the first time filing, leveraging a service that has assistance available to you, whether that be live help or hiring a tax professional. This may increase your budget, but worth the peace of mind and quality assurance that it’s done right.
Since Shipt Shoppers are independent contractors, tracking your income and expenses is crucial. Shipt provides earnings reports inside the app, but for tax purposes, you’ll also need to:
• Track mileage (driving to and from orders is tax-deductible).
• Keep records of expenses (gas, phone, supplies).
• Set aside money for quarterly tax payments.
Using a tool like Everlance makes this process automatic. The app tracks mileage, expenses, and tax deductions so you don’t leave money on the table.
If you’re looking for a flexible way to earn money on your own schedule, Shipt can be a great option. The key is to work strategically, take advantage of peak hours, bonuses, and tips, and track your earnings properly.
Shipt has partnered with Everlance to provide 20% off all plans for Shoppers & Drivers. Use the button below to get started and unlock effortless mileage & expense tracking
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Brad Thibeau is the Head of Growth & Partnerships at Everlance. Brad has worked at Everlance since 2021 with a focus on helping self employed people save time and money on their taxes.
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