Instacart Shopper Taxes in Colorado - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Colorado

Navigating the Rocky Mountains as an Instacart shopper offers flexibility, but understanding the tax implications of independent work is crucial for financial success. As an Instacart shopper in Colorado, earnings are considered self-employment income, requiring diligent record-keeping and accurate tax filing.

The IRS requires all self-employed individuals, including Instacart shoppers, to report their income on Schedule C (Profit or Loss from Business) with Form 1040. Furthermore, earnings exceeding $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from Instacart payouts.

How Colorado Handles Gig Worker Taxes

As a resident of Colorado, filing a state income tax return is mandatory, even if no federal tax is owed. Colorado operates under a flat income tax rate, currently at 4.40% for the 2025 tax year. This means all taxable income is subject to the same rate, simplifying the state tax calculation. Instacart income is considered taxable income and must be reported on Form DR 0440, Colorado Individual Income Tax Return. Self-employed individuals will also likely need to file Form DR 0440 Schedule D, which is used to calculate income and expenses related to a business or profession. Colorado also requires the payment of estimated taxes quarterly if your expected tax liability exceeds $1,000. Failing to do so can result in penalties. Colorado’s Department of Revenue provides comprehensive resources for self-employed individuals, including information on estimated taxes and available deductions. It’s important to note that Colorado does not offer a specific tax form tailored solely for gig workers; the standard individual income tax forms and schedules apply. Keep detailed records of all income and expenses to accurately calculate your state tax liability. You can find more information and resources on the Colorado Department of Revenue website: https://www.colorado.gov/revenue

Top Tax Deductions for Colorado Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. The 2025 rate is 70 cents per mile. Given Colorado’s diverse terrain and potential for significant mileage, especially in areas like the Denver metro area and mountain communities, this deduction can substantially reduce taxable income.
• Tolls & Parking: While Colorado doesn’t have extensive toll roads, expenses incurred for parking during deliveries are deductible. Keep receipts for parking fees in cities like Boulder or Fort Collins.
• Phone & Data Plan: The portion of your phone and data plan used for Instacart shopping is deductible. If you use your phone 70% for work, you can deduct 70% of the bill.
• Vehicle-Related Costs: Expenses like car washes (especially important during Colorado’s winter months!), phone mounts, insulated bags, and other supplies directly related to your Instacart work are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas or repairs in the same year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. 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 quarterly estimated tax payments to the IRS.