Tax season runs January 27 through April 15 and a lot of shoppers are about to get a nasty surprise. That $28,000 you made delivering groceries last year? Shipt didn't take out a single dollar in taxes. Not federal, not state, not Social Security, not Medicare. Nothing. You owe all of it.
Quick disclaimer: I'm not a tax professional. This isn't professional tax advice. I'm a Shipt shopper who learned this stuff the hard way and I'm sharing what I know. Talk to an actual accountant if your situation is complicated.
You're not an employee
Shipt classifies you as an independent contractor. That means you're self-employed. You run a small business, technically, even if it doesn't feel like one when you're hauling six cases of water up somebody's driveway.
W-2 employees have taxes pulled from every paycheck. You don't. Your employer pays half of Social Security and Medicare. You don't have an employer. You pay both halves.
If Shipt paid you $600 or more during the year, they sent you a 1099-NEC. Should've hit your inbox or your Shipt dashboard by the end of January. If you didn't get one because you made under $600, you still owe taxes on that income. The 1099 is a reporting threshold, not a tax threshold.
Self-employment tax hits different
This is the one that makes people want to cry.
Regular income tax, you already know about. Whatever bracket you fall into based on your total income, that's what you pay. But on top of that, self-employed people pay self-employment tax. 15.3%. That's 12.4% for Social Security and 2.9% for Medicare.
On $28,000 in net self-employment income that's roughly $3,955. Just the self-employment tax. Before your actual income tax.
One small relief: you can deduct half of your self-employment tax from your gross income. So that $3,955 means about $1,978 comes off the top before calculating your income tax. It's something. Not a lot.
Quarterly estimated taxes
The IRS doesn't want to wait until April for their money. If you expect to owe more than $1,000 in taxes for the year, you're supposed to pay quarterly. Due dates are April 15, June 15, September 15, and January 15 of the following year.
Skip these and you'll get hit with an underpayment penalty. Not huge, but annoying. And completely avoidable.
Most shoppers I know didn't pay quarterly their first year. Found out about the penalty when they filed. It's usually a few hundred bucks depending on what you owed. The IRS calculates it automatically when you file.
Setting aside 25-30% of every Shipt payment into a separate savings account is the simplest approach. Then pay quarterly from that account using IRS Direct Pay or the EFTPS system. Takes five minutes once you've set it up.
Mileage is your biggest deduction
This is where you get a chunk of money back. And it's where most shoppers leave thousands on the table because they don't track.
The IRS standard mileage rate for 2026 is 72.5 cents per mile. Every mile you drive for Shipt, from leaving home to your first store run to coming back home at the end of the day, is deductible at that rate. Driving to the store counts. Driving to the customer counts. Driving back to the store for your next order counts. Driving between zones counts. Sitting in the lot waiting for orders, those miles you drove to get there count too.
Say you drive 15,000 miles a year for Shipt. That's $10,875 in deductions. On $28,000 gross income, you just knocked your taxable self-employment income down to $17,125. That alone saves you over $1,600 in self-employment tax and probably another $1,000+ in income tax depending on your bracket.
But you can't claim it if you didn't track it.
Important: you can't use the standard mileage rate AND deduct actual vehicle expenses. Pick one. For most shoppers the standard rate wins because it's simpler and usually higher. If you drive a paid-off beater your actual costs might be lower than 72.5 cents a mile. If you've got a car payment, insurance, and repairs on a newer vehicle, actual expenses might beat it. Run the numbers both ways, but most people I know just take the mileage rate.
Your phone
You use your phone constantly for this job. The Shipt app, texting customers about substitutions, GPS navigation, checking the offer screen while you're in the lot. It's a work tool.
You can deduct the percentage of your phone bill that's work-related. If you use your phone 60% for Shipt and 40% for personal stuff, you deduct 60% of your monthly bill. On a $90/month plan that's $54/month, $648 for the year. Not nothing.
Be honest about the percentage. Don't claim 100% unless you have a dedicated work phone, which almost nobody does.
Gear and supplies
Everything you bought specifically for this job is deductible. All of it.
Hot bags. Insulated bags. That big catering bag you use for frozen stuff. Phone mount for your dashboard. Car charger. Portable phone charger for long days. Trunk organizer. Hand cart for heavy orders. Cooler bags.
Keep receipts. Photograph them if they're paper because thermal paper fades. A folder in your email for digital receipts works too.
Deductions shoppers forget about
Parking. Paid for parking at a meter or garage near a downtown delivery? Deductible.
Tolls. If your metro has toll roads and you use them to get to stores or customers, those are deductible.
Your Shipt shopper gear. If you bought a Shipt shirt or lanyard or anything branded for the job, that counts.
Portion of your car insurance. Only if you're using actual expenses instead of the standard mileage rate though. The mileage rate already bakes in insurance.
Health insurance premiums. If you're self-employed and paying for your own health insurance, you might be able to deduct the premiums. This one gets complicated, talk to an accountant.
Schedule C is your form
All your Shipt income and deductions go on Schedule C. It's the profit and loss statement for your "business." Revenue on top, expenses below, profit at the bottom. That profit number flows onto your 1040.
Schedule SE calculates your self-employment tax based on that profit number.
If your net profit after deductions is under $15,000 and you're single, or under $30,000 married filing jointly, the standard deduction wipes out your income tax. You still owe self-employment tax though. That never goes away as long as you have net earnings over $400.
Free tax software handles Schedule C fine for most shoppers. TurboTax Self-Employed, FreeTaxUSA, or H&R Block Self-Employed. They walk you through the inputs. You don't need to understand the form, you just need your numbers.
The three mistakes that cost the most money
Not tracking mileage. I keep saying it because it's the biggest one. If you drove 15,000 miles and didn't log any of them, you just threw away a $10,875 deduction. At a 22% tax bracket plus self-employment tax, that's roughly $4,000 you'll never get back. Gone.
Not saving receipts for supplies. $400 in hot bags, phone mounts, and chargers doesn't sound like much until you realize it saves you $100+ in taxes. Over a few years that adds up.
Not paying quarterly. The penalty isn't devastating but it's money you didn't have to lose. And if you owe $4,000 in April because you saved nothing all year, that's a problem most people aren't ready for.
Accountant or do it yourself
If Shipt is your only gig income and your tax situation is straightforward, you can probably handle this with tax software. Plug in your 1099 income, enter your mileage, list your expenses, file.
Get an accountant if you have multiple 1099 income sources, if you're married and your spouse has W-2 income, if you're claiming the home office deduction, or if you just don't trust yourself to get it right. A good tax preparer who handles gig workers will cost $200-400. They'll almost certainly find deductions you missed, and the peace of mind is real.
If you made over $40,000 from Shipt, get an accountant. The self-employment tax alone on that is over $5,600 and you want someone who knows what they're doing making sure you're not overpaying.
Start tracking your mileage today if you're not already. Right now. Every mile you don't log is money you're giving the IRS for free.
Auto Tip Map is an Android app for Shipt shoppers that tracks your orders, tips, mileage, earnings stats, and estimated fuel costs.