Instacart Shopper Taxes in Washington - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Washington

Navigating the bustling Pike Place Market and delivering groceries across Seattle as an Instacart shopper offers flexibility, but also comes with tax responsibilities. As an independent contractor, earnings from Instacart are considered self-employment income, requiring careful tax planning for the 2025 tax year.

The IRS requires all self-employed individuals, including Instacart shoppers, to report their income and pay taxes on it. This is typically done using Schedule C (Profit or Loss from Business) when filing your federal income tax return (Form 1040). Crucially, this income is also subject to self-employment tax, which covers both Social Security and Medicare taxes – taxes that are not automatically withheld from your earnings as they would be with a traditional employer.

How Washington Handles Gig Worker Taxes

Washington is famous for not having a personal income tax, which simplifies things for many residents. However, the state does have a Business & Occupation (B&O) tax. This tax is levied on the gross receipts of a business, regardless of profitability. For most Instacart shoppers, your gross income from deliveries likely won't reach the threshold requiring B&O tax payment. As of late 2024, the small business B&O tax rate is 0.471% of gross income, and the threshold for reporting is relatively low. It’s important to understand that even if you don’t owe B&O tax, you may still be required to register with the Washington State Department of Revenue and file regular reports. Staying informed about these requirements is crucial to avoid potential penalties. The Department of Revenue provides resources and guidance specifically for self-employed individuals and small businesses. Keep meticulous records of all income and expenses, as accurate reporting is essential. While Washington doesn't have a state income tax, proper B&O tax compliance is vital for Instacart shoppers operating within the state.

You can find more information and register your business with the Washington State Department of Revenue here: Washington State Department of Revenue

Top Tax Deductions for Washington Drivers

• Standard Mileage: The #1 deduction for most Instacart shoppers. The 2025 rate is 70 cents per mile. Given Washington’s relatively high gas prices, especially in the Seattle-Tacoma area, carefully consider if the standard mileage rate or actual expense method will yield a larger deduction.
• Tolls & Parking: Washington has various toll roads and bridges, including those around Seattle and Tacoma. Keep detailed records of all toll expenses and parking fees incurred while actively shopping or delivering.
• Phone & Data Plan: The portion of your monthly phone and data plan used for business purposes is deductible. If you use your phone exclusively for Instacart, you can deduct the entire bill. Otherwise, calculate the percentage of business use.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts for safe navigation, insulated hot bags, and even hand sanitizer are deductible as business expenses.

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 results in the largest deduction.

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment tax is comprised of two parts: 12.4% for Social Security and 2.9% for Medicare. Unlike traditional employment, platforms like Instacart do not withhold these taxes from your earnings. Therefore, it’s your responsibility to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS. This tax is applied to your net earnings – your gross income minus your business deductions – exceeding $400.