Instacart Shopper Taxes in Los Angeles, California - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Los Angeles, California

Navigating the bustling streets of Los Angeles as an Instacart shopper offers flexibility, but also brings tax responsibilities. As an independent contractor, earnings from Instacart are considered self-employment income, requiring careful tracking and reporting to both the IRS and the California Franchise Tax Board (FTB).

The IRS requires all self-employed individuals, including Instacart shoppers, to report their income and expenses on Schedule C (Profit or Loss From Business) when filing their federal income tax return (Form 1040). Furthermore, earnings exceeding $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions. Accurate record-keeping throughout the year is crucial for maximizing deductions and minimizing tax liability.

How California Handles Gig Worker Taxes

As a resident of California, filing a state income tax return is mandatory, even if no federal tax is owed. California employs a graduated tax system, meaning the tax rate increases as income rises. Instacart shoppers operating within Los Angeles, and throughout the state, are subject to these state income taxes on their net self-employment income. The primary form for self-employed individuals to report income and calculate tax liability is Form 540. California also requires you to calculate and pay estimated taxes quarterly if you expect to owe $1,000 or more in state income tax. This is particularly relevant for Instacart shoppers whose income fluctuates throughout the year. Given the high cost of living and frequent traffic congestion in Los Angeles, careful tracking of business miles is essential. Parking expenses, often significant in areas like Santa Monica or Downtown LA, are also deductible. The FTB provides resources specifically for independent contractors and gig workers, including information on estimated taxes and available deductions. Be aware that California has specific rules regarding deductions, and it's important to stay updated on any changes to state tax law. The FTB website is a valuable resource for understanding these regulations and ensuring compliance.

You can find more information on the California Franchise Tax Board website: https://www.ftb.ca.gov/

Top Tax Deductions for Los Angeles, California Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. The 2025 rate is 70 cents per mile. Given the consistently high gas prices in Los Angeles and surrounding areas, carefully consider whether the standard mileage rate or the actual expenses method will yield a greater tax benefit.
• Tolls & Parking: Los Angeles drivers frequently encounter tolls and parking fees, especially when servicing customers in areas like Hollywood or near LAX. These expenses are deductible. Keep detailed records of all toll and parking receipts.
• Phone & Data Plan: The portion of your monthly phone and data plan used for Instacart shopping is deductible. Maintain a log documenting the percentage of business use.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts for safe navigation, and insulated hot/cold bags used for deliveries are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, or repairs) in the same year. Choose the method that results in the largest deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment, Instacart and other gig platforms do not withhold these taxes from your earnings. Therefore, it’s your responsibility to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS.