Instacart Shopper Taxes in Montana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Montana

Navigating the Big Sky Country as an Instacart shopper offers flexibility, but it also comes with tax responsibilities. As an independent contractor, understanding these obligations is crucial for a smooth tax season.

The IRS requires all Instacart shoppers to report their earnings as self-employment income on Schedule C (Profit or Loss From Business) when filing their federal income tax return. Earnings over $400 necessitate the payment of self-employment taxes, which cover both Social Security and Medicare contributions. Platforms such as Instacart do not withhold these taxes, meaning it’s the shopper’s responsibility to calculate and remit them, typically through estimated tax payments throughout the year.

How Montana Handles Gig Worker Taxes

As a resident of Montana, filing a state income tax return is required, even if no federal tax is owed. Montana utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Montana’s income tax brackets are subject to adjustment for inflation, but generally range from 1% to 6.75%. Instacart earnings are considered taxable income and must be reported on Form 2, Montana Individual Income Tax Return. Self-employed individuals will also likely need to file Schedule K-1 (Form 2) to report business income. Montana also offers various credits and deductions that may reduce your tax liability, such as the Montana Earned Income Tax Credit. It’s important to note that Montana does not have a separate self-employment tax; instead, self-employment income is subject to the regular Montana income tax rates. Keep meticulous records of all income and expenses to accurately calculate your Montana tax obligation. For the most up-to-date information and forms, please visit the Montana Department of Revenue website: https://revenue.mt.gov/. Montana also offers resources specifically for small businesses and self-employed individuals on their website.

Top Tax Deductions for Montana Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Montana’s vast distances and potential for significant mileage, this deduction can substantially reduce taxable income.
• Tolls & Parking: While Montana doesn’t have extensive toll roads, any parking fees incurred directly while performing Instacart deliveries are deductible.
• Phone & Data Plan: The portion of your monthly phone and data plan used for business purposes (e.g., navigation, communicating with customers) is deductible. Keep a log of business usage to support this deduction.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts for safe navigation, and insulated hot bags used for deliveries are all deductible business expenses.

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

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because Instacart and similar platforms classify shoppers as independent contractors, they do not withhold these taxes from your earnings. Therefore, it is your responsibility to calculate and pay this tax, typically through quarterly estimated tax payments to the IRS. Failure to do so may result in penalties.