Instacart Shopper Taxes in North Dakota - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Navigating Your Taxes as an Instacart Shopper in North Dakota: A Comprehensive Guide

As an Instacart shopper traversing the expansive landscapes of North Dakota, you enjoy the flexibility of the gig economy. However, this freedom comes with distinct tax responsibilities. Unlike traditional employees, you operate as an independent contractor. This means your earnings from Instacart are classified as self-employment income, demanding meticulous attention during tax season.

The Internal Revenue Service (IRS) mandates that all self-employed individuals, including dedicated Instacart shoppers like yourself, accurately report their income and fulfill their tax obligations. This critical reporting is primarily executed via Schedule C, Profit or Loss from Business, which accompanies your federal income tax return (Form 1040). Furthermore, once your net earnings surpass $400, you are responsible for paying self-employment taxes. These taxes fund both Social Security and Medicare contributions, which, unlike W-2 employment, are not automatically deducted from your Instacart payouts.

A key strategy for reducing your tax burden is understanding the Qualified Business Income (QBI) deduction. This powerful deduction allows eligible self-employed individuals to deduct up to 20% of their qualified business income, potentially leading to significant savings on your federal income tax liability. Keeping impeccable records of all income and expenses is the bedrock of maximizing such deductions and ensuring accurate, stress-free filing.

How North Dakota Handles Gig Worker Taxes

As a proud resident of North Dakota, you are required to file a state income tax return, even if your federal tax liability happens to be zero. North Dakota utilizes a progressive income tax system, meaning your tax rate increases incrementally as your taxable income rises. For the 2025 tax year, it is essential to use Form ND-1, the North Dakota Individual Income Tax Return, to report your self-employment income.

This form enables you to calculate your state tax liability based on your total income and all applicable deductions. A valuable feature of North Dakota's tax code is the allowance for a deduction for federal income taxes paid, which can substantially reduce your state tax burden. Remember to meticulously track all income received from Instacart, as this directly influences your state tax calculation. It is important to note that North Dakota does not impose a separate self-employment tax akin to the federal government; your federal self-employment tax calculation simply impacts your overall tax picture.

The North Dakota Office of State Tax Commissioner provides comprehensive information and resources tailored for self-employed individuals, including detailed instructions for Form ND-1 and updates on tax laws. Maintaining meticulous records of all income and expenses remains paramount for accurate filing and unlocking potential tax savings at both the federal and state levels.

Top Tax Deductions for Instacart Shoppers

Maximizing your deductions is crucial for lowering your taxable income and, consequently, your tax bill. As an Instacart shopper, many everyday business expenses can be claimed. Here are some of the most common and impactful deductions:

• Vehicle Expenses: This is often your largest deduction. You have two primary methods:
  • Standard Mileage Rate: The most popular choice for many gig workers. For 2025, the rate is 70 cents per business mile driven. Given North Dakota's often challenging winter conditions and the distances between towns, accurately tracking and maximizing this deduction can significantly reduce your tax liability.
  • Actual Expenses: This method allows you to deduct the actual costs of operating your vehicle for business. This includes gas, oil, repairs, tires, insurance premiums, vehicle registration fees, and even a portion of your vehicle's depreciation. Choosing this method often requires more detailed record-keeping but can sometimes yield a larger deduction, especially if you have a newer vehicle or significant repair costs. Our Advanced Calculator is designed to help you compare the Standard Mileage Rate versus Actual Expenses, including Depreciation, so you can determine which option provides the greatest savings for you.
• Tolls & Parking Fees: While North Dakota isn't known for extensive toll roads, any parking fees or tolls incurred directly while performing Instacart deliveries are fully deductible. Keep receipts or a detailed log.
• Cell Phone and Data Plan: Your smartphone is essential for Instacart. You can deduct the business-use percentage of your monthly phone bill and data plan. Maintain a log or estimate based on typical usage to support this deduction.
• Home Office Deduction: If you regularly and exclusively use a portion of your home for your Instacart business – perhaps for managing schedules, tracking expenses, or organizing supplies – you might qualify for the home office deduction. This can be calculated using the simplified method or by deducting a percentage of actual home expenses like rent, utilities, and insurance. Our Advanced Calculator can also help you determine your potential savings from the Home Office deduction.
• Supplies & Equipment: Expenses like insulated delivery bags, phone mounts, car chargers, first-aid kits, gloves, and even the cost of car washes (especially important during North Dakota's winter months to maintain visibility and vehicle condition) are deductible if used specifically for your Instacart work.
• Professional Fees: The cost of tax preparation software or hiring a tax professional to assist with your self-employment taxes is a deductible business expense.
• Health Insurance Premiums: If you pay for your own health insurance and are not eligible to participate in an employer-sponsored health plan, you may be able to deduct the premiums.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas, repairs, or depreciation in the same tax year. It's imperative to choose the method that results in the greatest deduction. Our Advanced Calculator (mentioned below) is an invaluable tool for making this comparison effectively.

Understanding the 15.3% Self-Employment Tax

The self-employment tax is a significant component of your tax obligations as an Instacart shopper. This 15.3% tax rate covers both Social Security (12.4%) and Medicare (2.9%) taxes. Unlike traditional employment where these taxes are split and withheld from your paycheck, as an Instacart shopper, you are responsible for paying both the employer and employee portions yourself.

This 15.3% tax applies to your net earnings – that is, your gross Instacart income minus all your legitimate business expenses – once your net earnings exceed $400. Crucially, you can deduct one-half of your self-employment tax on Form 1040, which helps reduce your Adjusted Gross Income (AGI) and, consequently, your overall income tax liability. This deduction highlights another reason why meticulously tracking and claiming all eligible business expenses is so important: every dollar of legitimate expense reduces your net earnings, thereby lowering the base on which this 15.3% tax is calculated.

Utilize Our Advanced Calculator for Maximum Savings

We understand that navigating these choices can be complex. That's why we've developed an Advanced Calculator to simplify your tax planning. Our calculator allows you to:

• Compare the Standard Mileage deduction versus itemizing Actual Expenses, including vehicle Depreciation, to identify the method that yields the highest tax savings.
• Accurately calculate your potential Home Office deduction, helping you understand how much you can save by claiming this often-overlooked expense.
• Estimate your overall tax liability, giving you a clearer financial picture throughout the year.

Don't leave money on the table. Use our Advanced Calculator to ensure you are maximizing every possible deduction and keeping more of your hard-earned Instacart income.