Thursday, May 23, 2024

What Can I Write Off On My Taxes For Instacart

Don't Miss

Does Instacart Pay Weekly

TAX WRITE OFFS FOR DRIVERS – What Can You Write Off On Taxes Doordash Postmates Grubhub Uber Lyft

Instacart pays shoppers weekly on Wednesday via direct deposit for the previous Monday through Sunday week.

What this means is that youll work Monday through Sunday. Youll get paid the following Wednesday morning.

Instacart uses Stripe for its online payment service. This is what will show up on your bank register when you get paid.

Try To Get A Sense Of Order Volume And Competition In Your Area

Even if your skills and temperament make you a good fit for Instacart shopping, it may not be worth your time on a consistent basis. Whether Instacart shopping is more profitable than, say, driving for Lyft depends to some extent on factors outside your control in particular, order volumes and competition from fellow Instacart shoppers.

Anecdotal feedback from current and former Instacart shoppers is your friend here. In markets where the supply of shoppers swamps comparatively meager order volumes, average shopper earnings are sure to be lower than in markets where the shopper supply barely keeps pace with order growth. If youre fortunate enough to be in the latter scenario, youre far more likely to find Instacart shopping worth your while.

You Need To Track Expenses For Each Car Separately

Your decision to use standard mileage or actual expense is one you make on a car by car basis. You might have an old beater that doesn’t cost much per mile, and also a new car.

You’ll want to track your expenses and business miles on both cars. You might be better off claiming the 58¢ per mile on the beater but claiming actual expense on the new car.

Read Also: Did The Tax Deadline Get Extended

What Expenses Can You Claim

We’re going to get into a lot more detail if future articles.

Your major expense, if you drive, is your car. In fact, we’re going to have five different articles about your car expenses.

That might seem like overkill. However, as important as that car expense is and as many questions as people have about claiming their car or mileage, etc., I think it’s worth taking the time.

There’s a lot of rules around claiming your car mileage or expenses. You can do a lot of book keeping tracking every single penny you spend on gas, oil changes, depreciation, etc.

The IRS lets you simplify that by claiming a standard mileage rate. You can choose either the actual expense or the per mile rate

Your smart phone is reasonable and necessary for operating your business. That means your cell and data plan are as well.

We’ll get into more depth soon enough on the different kinds of things that qualify as expenses. If it’s reasonable and necessary for operating your business, you probably can claim it.

How To Sign Up For Instacart

Can I Write Off My RV?: What Every RVer Should Know About ...

Getting started on Instacart is a simple process:

  • Attend an in-person orientation . Choose a session in the app. This is part of the onboarding process.

  • Fill out the paperwork. Independent contractors have to sign a contractor agreement and W-9 tax form. Part-time employees sign an offer letter and W-4 tax form.

  • Register your Instacart payment card. Instacart shoppers use a preloaded payment card when they check out with a customer’s order. New shoppers can expect to receive their card within 5 to 7 business days. Shoppers may have the option to pick up a card, depending on their location.

Also Check: How Much Is New York State Sales Tax

Get More With These Free Tax Calculators And Money

  • See if you qualify for a third stimulus check and how much you can expect

  • Know what dependents credits and deductions

  • Know what tax documents you’ll need upfront

  • Learn what education credits and deductions you qualify for and claim them on your tax returnGet started

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Do You Have To Write Down All Of Your Expenses On Your Tax Form

You’re not required to list your individual expenses on your tax forms. You will fill out a form called Schedule C. On that form there’s a list of business expense categories.

What you will do is enter the total you spent for each category. There are some items that don’t have a category, and schedule C allows you to list them in a part called other expenses. .

Further on, we’ll get into some of the common expenses and what category they would fit under.

Recommended Reading: Do You Have To Pay Taxes On Plasma Donations

Employee Vs Independent Contractor

How you report your income and whether you can deduct expenses depends on whether you’re an employee or an independent contractor.

  • Employees generally receive regular paychecks usually with income, Social Security and Medicare taxes withheld from their wages. At year-end, they typically receive a Form W-2 showing the income they earned for the year and total tax withheld.
  • Independent contractors are typically considered self-employed. The companies that hire them don’t usually withhold income or payroll taxes from their payments. At the end of the year, they typically receive a Form 1099-NEC showing total earnings for the year.

If you’re not sure whether you’re an employee or a contract worker, talk to your employer.

Is It Better To Claim Actual Expenses Or The Standard Mileage Deduction As A Delivery Driver For Postmates Uber Eats Grubhub Postmates Or Any Other Gig Companies

What Can I WRITE-OFF? Self-Employed Business Expenses [Taxes in TurboTax Video #3]

The vast majority of the time, I think it’s going to be better to claim the standard mileage deduction. With the kind of miles we put on our cars, it’s really unusual for actual costs to be higher than the 58 cents per mile.

Here’s where I come down on it: I’m going the standard mileage route. It is simpler.

When you do actual value, there are a whole lot of weeds you have to wander into that can get complicated.

Even if you can claim a little more with the actual value method, what does that mean for next year? A lot of times you can’t go back to the standard mile rate. The standard mileage rate is probably going to save you more in future years.

Look at the long term value of any decision like this.

Read Also: How To Pay Llc Taxes

How Filing My Taxes Changed

Before I became self-employed, I was pretty familiar with filing by myself using TurboTax. Id even helped a couple of my friends file their own taxes, so I saw no reason why anything should change when I became self-employed. After all,;Im a personal finance writer and expert shouldnt I be capable of handling my own tax situation?

Ill never forget the first time I tried to file as a self-employed individual. I was inputting my information into TurboTax, but the software kept saying I hadnt paid any health insurance premiums for that year, even though I typed in the premiums correctly. TurboTax didnt have a customer service number I could call, and even my mother a CPA with a tax specialty couldnt help me.

Eventually, I gave up. I emailed an accountant friend who specializes in freelancers and he agreed to help me, even though it was just 11 days before the tax-filing deadline. I paid him $250 and he filed both my state and federal taxes on time.

Ive used a professional accountant to file my end-of-year taxes ever since, and not just because its easier than using a program.;My accountant pointed out some little-known deductions I wasnt using and made sure I was getting back every dollar possible.

If you have a side hustle on top of a regular job, you still have to pay attention to the tax code. Take the time to understand what deductions you can take. Remember, every minute spent figuring out your taxes is one more dollar in your pocket.

I’m Self Employed So Can I Claim A Meal That I Provide For Myself As A Business Expense

The IRS makes some allowances for a business providing meals to their employees if the meal is furnished on business premises and for the convenience of the employer.

Okay, so your car is sort of your business premise, right?

The problem with that is that you are not an employee. Even though you are self employed, you are still not considered an employee. You do not submit payroll taxes and don’t run an actual payroll.

Even if you incorporate and put yourself on payroll, if you own more than 2% of the business you cannot claim yourself as an employee.

Recommended Reading: What Is Tax Liabilities On W2

Hourly Earnings For Instacart Shoppers

In-Store Shopper Hourly Earnings

According to Glassdoor, in-store Instacart shoppers earn an average of $13 per hour. As of December 2020, 159 shoppers reported a range of earnings from $7 to $21 per hour. If you choose to become an in-store shopper, youll know ahead of time how much you can expect to make when you pick up a shift.

Full-Service Shopper Hourly Earnings

Glassdoor estimates that full-service Instacart shoppers earn an average base pay of $11 per hour before tips. With tips, shoppers earn an average of $12. reports an average of $16.74 per hour, including tips.

Create A Mileage Tracking Log Book

What Can I Write Off On My Taxes As Llc Business Owner ...

One way to track the miles you drive for Instacart is to keep a mileage log book in your car.

In this Reddit thread, different Instacart Shoppers share their tricks for logging miles, and the log book is actually quite popular.

Heres what user AlwaysRoseGoldWings says about using a log book:

  • My husband actually logs miles, costs etc, so he has me use a mileage book. I hate the stuff but he loves it. Its not hard to use, you just write your mileage pretty much every time you start your car . It also has a long underneath the miles so I write batch payments and tips after I get home for the day. They are around $8 on amazon and last awhile. I have an old Honda Civic so there arent many expenses but I keep receipts of things.

I like this idea because you can easily record your earnings at the end of a shift and you have a physical copy to hold onto for referencing.

You can also find cheap for under $10, so this isnt a significant upfront expense.

However, you have to make separate calculations for the miles you drive while youre not on active deliveries and the miles you drive for Instacart, so keep this in mind.

Read Also: How Much Tax Do You Have To Pay On Stocks

You Still Have To Track Your Miles When Claiming Actual Expenses As A Delivery Driver For Grubhub Uber Eats Doordash Postmates Etc

When we are using our personal car and/or filing individual taxes, because we are individuals, the IRS assumes that use of the car is for personal purposes.

It’s up to you to document when your car was used for business.

That means if you want to claim there was business use of the car, you have to have proof. That proof, your mileage log, is necessary whether claiming actual expense or the standard mileage rate.

Your mileage log will tell you what percent of your miles is for business. If 75% of your miles were for business, you can claim 75% of actual costs.

You still have to prove the business use which ever method you choose.

How Are You Doing Your Taxes This Year

Here at The Rideshare Guy we recommend that you diversify and drive for multiple companies in order to make the most amount of money. If you follow that advice, taxes can seem like a scary time. But they dont have to be!

All of the courier companies give you exactly what you need in order to file your taxes, and most give you a discount or even no charge tax services. You can also use a software like Keeper Tax to help calculate deductions.

If youre worried about doing your taxes properly, you can use the discounts on tax prep software to walk you through step by step how to file properly. I hope this guide to delivery taxes has helped you figure out what you need to collect beforehand and made you feel less stressed about filing your taxes.

Looking for more help as a delivery driver?;, Harrys flagship course for delivery drivers. Youll learn all about how to maximize your earnings as a delivery driver and how to accurately file delivery taxes.

How will you file your taxes this year? What tips do you have for someone worried about filing their taxes as an independent contractor?

Read Also: How Can I Make Payments For My Taxes

How To Log Mileage For Taxes In 8 Easy Steps

Lea Uradu, J.D. is graduate;of the University of Maryland School of Law, a Maryland State Registered Tax Preparer, State Certified Notary;Public, Certified VITA Tax Preparer, IRS Annual Filing Season Program Participant, Tax Writer, and Founder of L.A.W. Tax Resolution Services. Lea has worked with hundreds of federal individual and expat tax clients.

If you must drive as part of your job, you may be qualified to deduct the costs on your federal income tax return. If you qualify, get ready to document your travels as supporting evidence in the event your taxes are audited.

Delivery Industry Pay Overview

Uber Eats Driver Taxes: Can I write off my phone bill?

A major challenge of comparing the pay of various delivery platforms is that hourly wage information for independent contractors is very hard to come by.

Not only is it hard to dig up, but the amount drivers are capable of making is largely dependent on how many hours of work they put in, where the grocery store theyre driving to is located, and at what times they drive.

This is true of every grocery delivery service, even DoorDash and Shipt.

Sure, some platforms may come out and say you can make X amount of dollars per hour, but in many cases, delivery platforms avoid giving any hard numbers.

It makes sense.

Why would a delivery service throw out a subjective base pay number that many personal shoppers and drivers will find difficult to meet?

At one point Instacart advertised an hourly wage of $25 and it ended up backfiring as its shoppers expressed displeasure all across the web and in the media.

We have a sneaky suspicion that other services took note and pulled any lofty claims from their site.

You May Like: How To Calculate Sales Tax From Total

If You Claim Actual Miles In The First Year You Have The Car You May Not Be Able To Use The Standard Mileage Deduction For That Car In Later Years

It’s not as easy as switching back and forth from one year to the next.

It all has to do with depreciation. On newer and more valuable cars, it’s the loss of value of the car that often makes it better to take the actual cost than the mileage deduction.

There are some ways to claim depreciation that let you take most the value off in the first two years. Once you’ve done that, switching to a per mile rate is a lot like taking a lot of that depreciation twice.

So, the IRS won’t let you do that.

Tech Trouble With The Instacart App

I found several complaints from Instacart Shoppers about connectivity with the app. This can be a major headache since its your only way to see orders, delivery times, and other important information.

In fairness, it seems like the company has since fixed these bugs the latest version of the app is extremely well-rated.

You May Like: Can I File Old Taxes Online

Yeah But What About The Time Youre Putting In

Its not easy to estimate an across-the-board hourly pay for Instacart drivers because of all the variables.

The company doesnt divulge much data on pay; nor do they make any guarantees for Full-Service Shoppers.

In the past, Ive seen advertising from Instacart claiming drivers can make up to $25 an hour, but those seem to have disappeared.

Based on Kevins earnings figures and the hours he told me puts incall it 30 hours a weekhe averages $14-18 an hour.

Sure, hes had short 1-2 hour stretches in the $25-30 an hour range, but to cherrypick those wouldnt be an accurate overall picture.

Your location and the time of day will factor into how much you make as well.

According to Glassdoor, the average pay for an In-Store Shopper is $14/hour.

Insulated Bags & Blankets

What Real Estate Educational Expenses & Classes Can I ...

You can deduct anything that is ordinary and necessary for your delivery job. That includes any insulated bags and blankets you buy to keep food orders warm. Remember: the IRS is strict about using business supplies for personal reasons, so if you ever need a hot bag outside of work, be sure to use a separate one.;

Recommended Reading: Where To File Taxes For Free

Common Instacart Shopper Expenses

Lets look at some common expenses youll have as an Instacart delivery driver:

1. Gas

The price of gas varies greatly across the United States, averaging as low as $2.63 per gallon in Mississippi to as high as $3.72 per gallon in California, according to data from GasBuddy at the date of publication.

2. Vehicle Insurance

The average annual cost of vehicle insurance is $907.38 per year according to a 2014 study by Quadrant Information Services.

This number can vary widely, however, averaging as high as $2,500 per year in some states.

3. Car Payment

As of 2017, the average car payment on a new vehicle was $479 per month.

This can really cut into your earnings, though of course this amount can vary .

4. Vehicle Maintenance

Transmission fluid running low?

Windshield wiper break?

As an independent contractor, youre responsible for covering these costs, just as you would if you were using your vehicle for regular driving.

According to AAA, the average cost of repairs, maintenance and tires is $99 a month for a new car.

Youll likely need to drop a few hundred dollars all at once for a repair, so make sure to put aside some of what you make each week to cover that.

5. Vehicle Registration and Fees

These vary from state to state, but are usually under $100.

Youll have to pay this fee as long as you own a car, but since youre using your car for business, you should still consider it.

6. Taxes

Taxes are an expense that many independent contractors overlook.

More articles

Popular Articles