Independent contractors managing self-employed taxes should stay proactive about independent contractor deductions and year-round recordkeeping.
Why It Matters for Self-Employed Taxes
Receipts pile up fast when you batch multiple Instacart orders. The platform reimburses some items, but you still need proof of payment if the IRS questions your write offs.
Key Earnings & Expense Buckets
- Snap photos of every receipt and rename files with order number, store, and date before tossing paper copies.
- Log insulated cooler bags, reusable totes, and dry ice as cold chain supplies.
- Count mileage from store to customer plus any required returns or replacements the same day.
Weekly Workflow
- File receipts into cloud folders labeled by month and store for quick lookup.
- Balance Instacart reimbursements against your card statements weekly so unmatched charges do not linger.
- Batch orders by neighborhood to reduce unpaid driving time and boost per hour profit.
Tools & Next Steps
- Genius Scan or Adobe Scan for high resolution receipt capture synced to Dropbox.
- Expense tracking templates that flag reimbursed versus unreimbursed purchases automatically.
- A dedicated business debit card so your Instacart purchases never mix with personal groceries.
When every receipt is searchable, Instacart audits are painless and you gain a clearer picture of true profit.
How do I track mileage for gig work in 2025?
Use IRS-approved mileage logs or apps like Everlance to document date, distance, and purpose for every self-employed trip.
Can I deduct equipment or vehicle lease payments?
Yes, deduct the portion tied to independent contractor work; keep receipts and lease statements for 1099 tax audits.
When should I pay quarterly estimated taxes?
Send payments by April, June, September, and January to cover self-employed taxes and avoid IRS penalties.
What records should independent contractors keep?
Maintain income statements, mileage reports, receipts, and bank deposits to support deductions and 1099 filings.
How can I reduce surprise tax bills as a freelancer?
Estimate your independent contractor deductions monthly, set aside 25-30% of income, and automate transfers to a tax savings account.