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Your Ultimate Guide to Instacart Tax 1099 Form

 Whether you are a side hustler or deliver groceries for full-time, driving for Instacart comes with its own benefits. When you are a full-time shopper, you are able to set your own schedule while heading out to the local stores as per your wish. Still, when you work for yourself, it will have some downsides as well -especially when you have to understand the Instacart 1099 Form.  


Let us help you understand all about Instacart Tax 1099 Form and how you can handle the same seamlessly. 


How Instacart Tax Works? 

Instacart taxes can be quite complicated to understand -especially if you are a beginner. You should understand that your tax situation will vary depending on whether you are a full-time shopper or an in-store shopper.  


  • Taxes for In-store Instacart Shoppers: At Instacart, in-store shoppers are categorized as Instacart employees. For taxation, they are treated in the same fashion as those working in a typical 9-to-5 setting. Instacart takes care of the overall withholding for these shoppers while sending them the W-2 Form during tax time.  

  • Taxes for Full-time Instacart Shoppers: You can be a full-time Instacart shopper by working as the store shopper or a full-time delivery driver. Your taxes will turn out to be more complicated. It is because you will be considered an independent contractor -not as an Instacart employee. When compared with in-store shoppers, full-time Instacart shoppers do not experience tax withholding. They are expected to file and pay the taxes themselves.  


Taxes Paid by Full-time Instacart Shoppers 

Unlike typical in-store Instacart shoppers, full-time shoppers or delivery drivers are expected to pay self-employment taxes. These are also referred to as the FICA tax and explain how independent contractors and freelancers can contribute to Medicare and Social Security.  

W-2 employees are also expected to pay the FICA tax -around 7.65 percent. The amount paid by them is matched by the respective employer.  

However, when you are an Instacart delivery driver and self-employed, you will end up paying the 7.65 percent amount twice -totaling up to 15.3 percent. This is in addition to the state and federal income taxes as well. 

How Much to Set Aside for Instacart Taxes? 

The whopping 15.3 percent can create some expensive tax bills every month. To avoid getting the monthly shock, you can make use of a reliable self-employment tax calculator to ensure that you set ample money aside for taxation.  

Understanding Important Instacart 1099 Tax Forms 

Knowing the exact amount you need to pay is the primary step. To file your Instacart tax, you are expected to fill up the correct tax form – Instacart Tax 1099-NEC.  

The 1099-NEC form will reveal how much you have earned on the respective platform. It is important to note that the IRS will receive the same copy. Therefore, they will see exactly how much you are making.  

Conclusion 

As an Instacart shopper, it is imperative for you to understand the Instacart tax 1099 Form and its implications to maximize your savings. 

Also Read - All You Need to Know About Instacart 1099 Form


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