What qualifies as a business deduction for Instacart and Shipt?
If you spend your own money on gas, mileage expenses, or your phone bill while on the job for food delivery or grocery services like Instacart or Shipt, you can deduct these expenses at tax time.
For car use, you would either apply the mileage method (57.5 cents per mile in 2020) or the actual expenses method, which requires you to track all expenses including gas, insurance, repairs, maintenance, loan interest, registration costs, and depreciation. For food delivery workers, it’s usually easier to use the mileage method.
For phone bills, you multiply your phone expenses by the percentage you use your phone for food delivery.
Do I have to claim cash tips as income?
Yes. The IRS requires that all workers earning tips must keep a daily record of their tips, report tips to their employer (unless less than $20), and report your tips on your tax return using Form 4137