Instacart Shopper Taxes in New Mexico - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in New Mexico

Navigating the Land of Enchantment 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 attention during tax season.

The IRS requires all self-employed individuals, including Instacart shoppers, to report their income and pay taxes. This is primarily done using Schedule C (Profit or Loss from Business) when filing your federal income tax return (Form 1040). Furthermore, because no taxes are automatically withheld from your Instacart earnings, you’ll likely owe self-employment tax, which covers both Social Security and Medicare contributions.

How New Mexico Handles Gig Worker Taxes

As a resident of New Mexico, you are required to file a state income tax return, even if your only income is from Instacart. New Mexico utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, New Mexico’s primary form for reporting self-employment income is Form W-4 and Schedule IN (Income from Sources Within New Mexico). This form allows you to calculate your New Mexico taxable income and determine your state tax liability. New Mexico also offers various credits and deductions that may reduce your overall tax burden. It's important to note that New Mexico does not have a separate self-employment tax like the federal government; your self-employment income is simply added to your other income and taxed at the applicable rate based on your filing status and income bracket. The New Mexico Taxation and Revenue Department provides detailed information and resources for self-employed individuals. Keep accurate records of all income and expenses throughout the year to ensure accurate filing and maximize potential deductions. Failure to file or pay taxes on time can result in penalties and interest.

You can find more information and resources on the New Mexico Taxation and Revenue Department website: https://www.tax.newmexico.gov/

Top Tax Deductions for New Mexico Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. The 2025 rate is 70 cents per mile. Given New Mexico’s relatively expansive geography and the distances often covered during deliveries, especially in rural areas, this rate can significantly reduce your taxable income.
• Tolls & Parking: While New Mexico doesn’t have extensive toll road systems, any tolls incurred during deliveries are deductible. Parking fees directly related to Instacart deliveries are also deductible.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan that is used for business purposes. Keep a log of your business usage to support this deduction.
• Vehicle-Related Costs: Expenses like car cleaning supplies (to maintain a professional appearance), phone mounts, insulated hot/cold bags, and dash cams 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 yields the greater deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment where your employer withholds these taxes, as an Instacart shopper, you are responsible for paying both the employer and employee portions. This amounts to 15.3% on your net earnings (income after deductions) exceeding $400. You’ll calculate this tax on Schedule SE (Self-Employment Tax) and include it with your Form 1040.