The Ultimate Tax Guide For Instacart Shoppers - Stride Blog

• When picking up orders

• When delivering orders

• Between deliveries

• To the gas station while working

• To shops for car maintenance

Heads up: Your mileage from to and from home at the beginning and end of your work day is NOT deductible.

How do I deduct my mileage?

There are two ways to deduct mileage. Depending on your vehicle, one option may save you a lot more money than the other:

1. The Standard IRS Mileage Deduction: You can deduct a fixed rate of 67 cents per mile in 2024, up 1.5 cents from 2023. This rate covers all the costs of operating your vehicle, like gas, depreciation, oil changes, and repairs. It’s typically the best option for most Instacart shoppers.

2. The Actual Expenses Method: This method lets you add up and deduct each of your individual business-related vehicle expenses. It’s typically a more cost-effective option for people who purchased a vehicle within the past year, or are paying monthly loan payments for a new vehicle.

Can I use this deduction even though part of the payment I get from Instacart is based on estimated mileage?

Yes! Although Instacart uses estimated mileage as one component in its calculation of how much payment to offer per batch, this is not a mileage reimbursement, so you can still deduct work-related mileage from your taxable income. Just make sure you have the documentation to back it up.

2. Your Phone (and Phone Bills)

You can deduct anything that is “ordinary and necessary” for your delivery job, including your:

• Phone

• Phone bills

• And necessary phone accessories, like car holders, chargers, or clips

Where on my tax form can I add phone expenses?

You can include any cell phone expenses on Part 5 of your Schedule C. After totaling your other expenses, write the final amount on line 27a.

Can I deduct my entire phone bill from my taxes or only a percentage?

That depends. You can only deduct expenses as a percentage of business use. This means that if you use your cell phone for work 50 percent of the time, and for personal reasons 50 percent of the time, you can only deduct 50 percent of your phone costs.

Heads up: the IRS looks at technology deductions very carefully, so do your best to accurately estimate this percentage.

Stride Tip → One of the best ways to estimate work-related phone usage is to go through your phone records for a typical month, calculate how much of your data and phone calls occurred during work hours, and apply the average to the rest of the year.

Do I need receipts for all the phone accessories I bought for my job?

Any expense you deduct on your tax return should have good documentation to back it up. If you are missing receipts, we recommend looking through your credit card and bank statements for proof of their purchase.

3. Insulated Bags and Blankets

You can deduct anything that is “ordinary and necessary” for your delivery job. That includes any insulated bags and blankets you buy to keep food orders warm. Remember: the IRS is strict about using business supplies for personal reasons, so if you ever need a hot bag outside of work, be sure to use a separate one.

4. Tolls

Any toll fees that you pay while working are tax deductible, as long as they’re not already being reimbursed to you. Note: You cannot deduct tolls to and from work.

If you are missing documentation for any tolls, review past bank and credit card statements. You can access online statements for electronic toll collection devices, like an E-ZPass.

5. Parking

Sometimes you may choose to pay for parking in the city while working. That’s tax deductible! Unfortunately, traffic violations, speeding tickets, and parking tickets are not deductible because they’re incurred due to inappropriate driving and not directly because of work.

6. Roadside Assistance

Fees for AAA or other roadside assistance programs are tax deductible, but only the percentage that is used for work. You can use your business mileage log to determine the business to non-business mileage ratio for your car, and apply that ratio to find the deductible portion of your AAA membership.

7. Health Insurance

Monthly health insurance payments are deductible as long as you:

• Are self-employed (for example, you shop with Instacart full-time)

• Have a business profit (Profit = Business Income - Business Expenses)

• Are not able to receive health insurance coverage from a spouse or employer