Instacart Shopper Taxes in Indiana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Indiana

Navigating the bustling grocery scene as an Instacart shopper in Indiana offers flexibility, but it also comes with tax responsibilities. As an independent contractor, earnings from Instacart are considered self-employment income, requiring careful attention during tax season.

The IRS requires all self-employed individuals, including Instacart shoppers, to report their income and pay taxes. This is typically done using Schedule C (Profit or Loss from Business) when filing 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 a smooth tax filing process.

How Indiana Handles Gig Worker Taxes

As a resident of Indiana, a state income tax return is required, even if no state income tax was withheld from your Instacart earnings. Indiana operates under a flat income tax rate, currently at 3.15% for the 2025 tax year. This means all taxable income is subject to the same rate. Instacart shoppers will report their self-employment income on Schedule SE (Self-Employment Tax) and then transfer that amount to Form IT-1040, Indiana Resident Income Tax Return. The primary form for self-employed individuals in Indiana is Form IT-1040, along with Schedule SE and potentially Schedule IN-K1 if operating as a partnership or S-Corporation. Indiana also offers various credits and deductions that may reduce your tax liability. It's important to note that Indiana does not have a separate tax form specifically for gig workers; you use the standard individual income tax forms. Indiana’s Department of Revenue provides resources and tools to help navigate state tax obligations. Estimated tax payments may be required quarterly if you anticipate owing $1,000 or more in Indiana state income tax. Failing to make these payments could result in penalties. Keep detailed records of all income and expenses to accurately calculate your state tax liability.

Top Tax Deductions for Indiana Drivers

• Standard Mileage: The #1 deduction for most Instacart shoppers. The 2025 rate is 70 cents per mile. Given Indiana’s relatively stable gas prices, the standard mileage rate is often the most advantageous method for calculating vehicle expenses.
• Tolls & Parking: While Indiana doesn’t have extensive toll roads like some states, any tolls incurred during deliveries are deductible. Parking fees directly related to Instacart shopping are also deductible.
• Phone & Data Plan: The percentage of your phone and data plan used for Instacart shopping is deductible. Keep records of business usage to support this claim.
• Vehicle-Related Costs: Expenses like car cleaning supplies, phone mounts, insulated hot/cold bags, and dash cams used specifically for Instacart deliveries 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

The 15.3% self-employment tax covers both Social Security and Medicare taxes. Unlike traditional employment where these taxes are withheld from your paycheck, as an Instacart shopper, you are responsible for paying both the employer and employee portions. This tax is calculated on your net earnings (income minus business expenses) exceeding $400.

For more information on Indiana state taxes, please visit the Indiana Department of Revenue.