Working as a delivery guy at Instacart is a great way to make $200-$500 a week. If you need extra cash, you can be the Instacart shopper and work as an independent contractor at flexible times. You can grab the ordered groceries whenever you are free and deliver them to the customers. Get a small delivery fee for each successful delivery and earn extra cash. But, do you know this income is taxable? You need to fill out the Instacart 1099 form issued by your client at the end of the financial year and pay your dues before April 15th to the IRS to avoid penalties.
Instacart 1099 Form
Managing your taxes is challenging, especially if you are a full-service shopper at Instacart. Those who are regular employees have nothing to worry about, as the Instacart team manages their tax part. A fixed percentage of their income is withheld from their paycheck for tax purposes, and the remaining is credited to their account.
Full-service shoppers, however, do not get this benefit. They are supposed to calculate their self-employment tax after subtracting allowed deductions from their income and pay the dues during the tax season. Preparing your tax returns in advance makes sense, as that’s the only way to ensure you don’t underpay or overpay your taxes.
1099-K or 1099-NEC: Which Form Will I Get?
Whether you work full-time or part-time at Instacart, you are liable to pay tax on your earnings from the platform. You will receive different tax forms based on how much you make from delivering groceries.
Earlier, the IRS had introduced 1099-NEC for disclosing non-employment compensation or your earnings outside the regular job. Later, the form was replaced by the 1099-MISC when an additional section for people with self-employment income was added to the form. However, 1099-NEC again came into effect in 2021.
That’s why Instacart shoppers get the 1099-NEC form. However, this is only for people who get paid directly from the Instacart app. If you get paid through PayPal or other third-party services, you will get a 1099-K. This form is also issued for people who report an income of more than $20,000 from Instacart delivery.
What If You Don’t Get a 1099 Form?
Instacart will issue a 1099 form for each self-employed individual who worked for them during a calendar year. If they paid you over $600, they would send you a 1099-NEC and a copy of it to the IRS showing the total amount you owe in taxes. If you don’t receive this form, it’s most likely because you didn’t meet the $600 threshold.
But that’s not always the case. Sometimes, the employer forgets to issue the 1099 form, but the IRS still expects you to pay the dues before April 15th. It’s best to keep track of your income from deliveries to know how much you earned from self-employment work in a year and what you owe in income tax. Use the income tax calculator to determine your total taxable income.
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