Shipt contractors work in different ways. Some shop orders at Target and other retailers. Some handle the delivery side. Many do both. Regardless of your role, you are an independent contractor, which means Shipt does not withhold taxes from your earnings and you are responsible for tracking and claiming your own deductions.
This guide is organized by role so you can go straight to the deductions that apply to your work. Start with the section covering all Shipt contractors, then move to the section that matches how you work.
Deductions for all contractors with Shipt
Phone, Communication Tools, and Member Management
Shipt's personal shopper model is built on direct communication with members. Whether you are shopping, delivering, or both, your phone is your primary business tool. You use it to accept orders, text members about substitutions, send photos of available alternatives, navigate to addresses, and manage your schedule. That level of business use makes your phone and related tools a significant and fully legitimate deduction.
These deductions apply to all Shipt contractors regardless of role.
📱
Phone and data plan
Deduct the business-use percentage of your monthly phone bill and device cost. Shipt contractors use their phones more actively during a shop than most gig workers on other platforms, texting members, sending photos, and managing substitutions in real time. If your phone is used 70% for Shipt work and 30% personally, 70% of each cost is deductible.
🔌
Car charger and phone mount
Keeping your phone charged and accessible between the store and delivery addresses is a basic operational need. Both are deductible business accessories for any Shipt contractor.
📲
Business app subscriptions
Mileage tracking apps, expense management software, and navigation apps with paid tiers used specifically for your Shipt work are deductible. Keep a record of what each subscription costs and how it supports your business.
Parking & tolls
Parking fees and tolls paid while shopping or delivering are deductible for all Shipt contractors regardless of which vehicle expense method you use. Target and grocery store parking is typically free, but paid lots near certain locations, metered street parking, and tolls on delivery routes all qualify. Keep receipts and toll account statements throughout the year.
🅿️
Parking fees
Any parking fees paid while completing a Shipt order are fully deductible. This includes metered street parking near stores or delivery addresses and paid lots. Personal parking does not qualify.
🛣️
Tolls
Tolls paid on routes taken during active Shipt orders are fully deductible. If you use an electronic toll account, your statements serve as documentation. Only deduct tolls you paid out of pocket that were not reimbursed by Shipt.
Shipt platform fees & service costs
The fees associated with operating as a Shipt contractor are deductible business expenses. These are easy to overlook because they come off your earnings automatically, but they represent a real cost of doing business and should be tracked and claimed.
💸
Shipt service and platform fees
Any fees Shipt deducts from your earnings as a cost of operating on the platform are deductible as a business expense. Review your earnings statements to identify what is being withheld and track it as a separate line item in your expense records.
🏦
Bank and payment transfer fees
Fees associated with receiving your Shipt earnings, including instant transfer fees or business account maintenance charges, are deductible. Small on their own but worth tracking across a full year of payouts.
Retirement & health costs
Shipt does not offer health coverage, retirement contributions, or any of the benefits that come with traditional employment. As an independent contractor, you fund all of that yourself. The IRS recognizes this and provides self-employed workers with specific above-the-line deductions to help offset those costs. These apply to all Shipt contractors regardless of role.
🏥
Health insurance premiums
If you pay for your own health, dental, or vision coverage and are not eligible for a plan through a spouse's employer, you may be able to deduct those premiums in full. This is an above-the-line deduction available even without itemizing.
💰
Retirement account contributions
Contributions to a SEP-IRA, Solo 401(k), or SIMPLE IRA reduce your taxable income dollar-for-dollar. With no employer match available through Shipt, building your own retirement savings is entirely on you, but the tax benefit makes it one of the most powerful deductions available to self-employed workers.
🧾
Self-employment tax deduction
As a self-employed Shipt contractor, you pay both sides of Social Security and Medicare taxes. The IRS lets you deduct half of that self-employment tax from your gross income above the line, regardless of whether you itemize.
📋
Tax preparation fees
The cost of tax software or a CPA to handle your Schedule C and self-employment taxes is deductible. Independent contractor returns are more involved than a standard W-2 filing, and the preparation cost is a legitimate business expense.
Shipt shopper deductions
Mileage
Shipt shoppers who do not handle delivery have a more limited mileage deduction profile than drivers. Your deductible miles are tied specifically to business errands directly connected to completing a shop. The drive from your home to the store is a personal commute and does not qualify. Once you are actively working, certain trips do.
If you both shop and deliver, your full mileage picture is covered in the Shipt Driver section below.
🏪
Driving between store locations for the same order
If a member's order requires items from more than one store, the miles driven between those locations to complete that specific order are deductible. Log the trip with the order as the documented business purpose.
🛍️
Running business errands for your Shipt operation
Driving to purchase insulated bags, reusable shopping bags, or other equipment used exclusively for your Shipt work counts as deductible business mileage. Note the purpose and what you purchased so the trip is clearly documented.
🔋
Driving to pick up a business purchase
If you drive to pick up a phone accessory, replacement equipment, or any other item purchased specifically for your Shipt work, those miles are deductible. Keep the receipt for the purchase and log the trip together so the business purpose is clear.
⚠️ Important for shoppers who don't deliver
If your role is shopping only and you do not drive orders to members, your deductible mileage is limited to the specific business errands listed above. The drive from your home to the store and back is a personal commute. Overclaiming mileage is one of the most common audit triggers for gig workers, so only log miles that have a clear and documentable business purpose.
Shipt shopping equipment & supplies
The tools that make you a better Shipt shopper are legitimate business expenses. From keeping cold items cold to managing a full cart efficiently, the gear you invest in to do the job right is deductible.
🧳
Insulated bags and soft coolers
Maintaining the temperature of cold and frozen items from the shelf to the member is part of doing the job correctly. Insulated bags and soft coolers purchased for your Shipt work are fully deductible. If Shipt provided or reimbursed any of these, that portion does not qualify.
🛍️
Reusable shopping bags
Reusable bags purchased specifically for your Shipt shopping are deductible. Some stores charge per bag at checkout, and using your own is both cost-effective and a trackable business expense.
🧤
Gloves and handling supplies
Protective gloves or other handling supplies purchased for your shopping work are deductible as ordinary business expenses. Small purchases but easy to document and fully legitimate.
Shipt driver deductions
Mileage
If you handle deliveries for Shipt, your mileage deduction profile looks closer to other delivery platforms. Every mile driven as part of getting an order from the store to a member's door is deductible. Shipt does not provide a mileage summary for tax purposes, so independent tracking from the first day is essential.
You have two options for deducting vehicle costs: the standard mileage rate or actual vehicle expenses. You must choose one and stick with it for the full tax year for that vehicle.
🚗
Store to member's front door
Every mile from the store where you picked up the order to the member's delivery address is fully deductible. For Shipt drivers covering suburban delivery zones, this leg of each order is the core of your mileage deduction.
📦
Multi-stop delivery routes
When a batch includes deliveries to more than one member, every mile between each stop is deductible. Log each leg of the route to keep your records accurate and complete.
🗺️
Heading to a zone with more available orders
Driving to a Target or delivery zone with higher order volume while the app is active and you are available counts as deductible business mileage. You are actively positioning yourself for work, which meets the IRS standard for business purpose.
🔩
Taking your car in for an oil change or tire rotation
Miles driven to and from a service appointment for your delivery vehicle are deductible at your business-use percentage. Log the trip and keep the service receipt as documentation.
📌 Shipt does not track your delivery mileage
Shipt does not provide a mileage log you can use for your taxes. Every business mile needs to be tracked independently. Everlance runs automatically in the background while you drive and logs every trip without any manual entry, so your records are always current and IRS-compliant.
Car expenses
If you choose to deduct actual vehicle expenses instead of the standard mileage rate, you can claim the business-use percentage of every dollar you spend keeping your delivery vehicle on the road. Calculate your business-use percentage by dividing your Shipt miles by your total miles for the year and apply that to each qualifying expense.
You cannot combine this method with the standard mileage rate for the same vehicle in the same year.
⛽
Gas
Deduct the business-use percentage of your annual fuel costs. Shipt delivery zones often cover spread-out suburban areas, making fuel a meaningful expense for active drivers. Save receipts or use a fuel tracking app throughout the year.
🛡️
Car insurance
Auto insurance premiums are deductible at your business-use percentage. If you carry a delivery rider or commercial add-on to cover your Shipt work specifically, that portion may be fully deductible. Standard mileage rate filers cannot deduct insurance separately.
🔧
Repairs and maintenance
Brake work, new tires, oil changes, and other upkeep are deductible at your business-use percentage. Keep all service records. These costs are already factored into the standard mileage rate and cannot be deducted separately under that method.
🚘
Depreciation
Under the actual expense method, you can deduct a portion of your vehicle's depreciation each year at your business-use percentage. The calculation depends on when the vehicle was placed in service. A tax professional can help you get this right and maximize the deduction.
🧼
Car cleaning
Delivering groceries and household items means spills and mess are part of the job. Regular car cleaning is a practical necessity for Shipt drivers and is deductible at your business-use percentage under the actual expense method.
🏷️
Registration and fees
Annual vehicle registration and state or local fees tied to your vehicle are deductible at your business-use percentage under the actual expense method.
Delivery equipment
The gear that keeps orders safe, organized, and intact during transit is a legitimate and fully deductible business expense for Shipt drivers.
🧳
Insulated bags and coolers
Keeping cold and frozen items at temperature from the store to the member's door is part of delivering correctly. Insulated bags and soft coolers purchased for your deliveries are fully deductible. Any items provided or reimbursed by Shipt do not qualify.
🪢
Trunk organizers and cargo nets
Keeping grocery bags upright and orders organized during transit protects the delivery and your rating. Organizers and cargo nets purchased for your Shipt deliveries are deductible business equipment.
📷
Dash cam
A dash cam purchased for your delivery vehicle is deductible at your business-use percentage. It serves as documentation in the event of an incident and is a reasonable safety investment for anyone driving professionally.
📡
Roadside assistance membership
A breakdown mid-delivery with a car full of groceries is a direct hit to your income and your member rating. A roadside assistance plan purchased to support your delivery work is deductible at your business-use percentage.
What Shipt contractors cannot deduct
These are the most common deduction mistakes made by Shipt shoppers and drivers, including some that are specific to how Shipt operates.
| Expense |
Why it doesn't qualify |
| Drive from home to the store |
For shoppers and drivers alike, the miles from your home to the store where you begin working are a personal commute and are not deductible. |
| Groceries purchased for yourself |
Shopping a member's order does not make your own grocery purchases deductible. Personal food bought during or between shifts is a personal expense. |
| A personal Shipt membership |
If you pay for a Shipt membership to use as a customer for your own household shopping, that is a personal expense. It does not become deductible because you also work for Shipt. |
| Reimbursed equipment or costs |
Any expense Shipt covered or reimbursed cannot also be claimed as a deduction. Only out-of-pocket costs qualify. |
| Clothing and personal items |
Comfortable clothes and shoes worn while shopping or delivering are personal expenses. There is no required Shipt uniform, so clothing does not qualify as a deductible business expense. |
Shipt tax deduction frequently asked questions
Does Shipt send a 1099?
Yes. Full-service Shipt contractors who earn $600 or more in a calendar year will receive a 1099-NEC. You are required to report all income regardless of whether you receive a form, and even if you earned less than $600.
Do Shipt shoppers who don't deliver get a mileage deduction?
Yes, but it is limited. Shoppers who do not handle delivery can deduct miles driven between stores for a single order and miles driven for specific business errands like purchasing equipment. The drive from home to the store and back does not qualify. Drivers who handle delivery have a significantly larger mileage deduction available to them.
Do Shipt contractors have to pay quarterly taxes?
If you expect to owe more than $1,000 in federal taxes for the year, the IRS requires quarterly estimated payments. Shipt withholds nothing from your earnings, so planning ahead throughout the year is essential to avoid an underpayment penalty at tax time.
Can I deduct a personal Shipt membership?
No. A Shipt membership used for your own household shopping is a personal expense. The fact that you also work for Shipt does not make it a deductible business cost.
Do I need to keep records for all my deductions?
Yes. Every deduction you claim needs documentation. For mileage, the IRS requires a log with dates, destinations, and business purpose recorded as trips happen. For equipment and other expenses, keep digital or physical receipts. An automatic tracking app makes staying organized throughout the year significantly easier.
.svg){kind=icon}
