Did you know that nearly half of American workers have a side hustle?
This is in addition to their regular full-time or part-time positions.
A side hustle can help you make ends meet, have more disposable income, or have more to save.
One of the easiest side gigs that almost anyone can do is working as a shopper for Shipt.
What is Shipt?
With the pressures of modern urban life, convenience services are in high demand.
One popular convenience service is Shipt, which offers same-day deliveries for household shopping.
Shipt customers can shop for groceries, baby-related products, cleaning supplies, electronics, alcohol and so on.
Once a customer makes an order on the app or website, a Shipt Shopper connects with them to schedule delivery of the shopping.
Shipt promises customers that they will receive their shopping as soon as in one hour.
Being a Shipt Shopper
When you sign up as a Shipt Shopper, you put yourself on the shopping schedule to shop and deliver orders in your area.
Shipt allows shoppers to limit their availability to a small area (within a few miles with at least one shop). But you can also set your availability to a larger area.
Once you sign up, you will start receiving shopping requests in your area.
As a shopper, you can see details such as the size of the order, the stores where you’ll shop, and the final destination to deliver the shopping.
You can choose which orders to accept, depending on your preferences and availability.
However, Shipt rates shoppers’ acceptance rate. If you reject too many orders, you can end up being banned from working as a Shipt Shopper.
Once you accept a Shipt order, you drive to the store and shop for the specified items. Then you pay at the register with a pre-paid Shipt card. Finally, you deliver the shopping to the customer’s location.
To increase your earnings and save on time, it is advisable to shop multiple orders at a time.
Shipt pays shoppers a $5 flat rate and 7.5% commission on the total store receipt.
Shipt shoppers also get to keep 100% of any tips from customers.
But in January 2020, Shipt started testing a new pay structure that takes into account how long it takes to complete an order.
Will I Get Reimbursed for Gas?
Unfortunately, Shipt doesn’t reimburse shoppers for their driving expenses.
As an independent contractor, you are expected to foot your own bills (including gas and car repair and maintenance).
To maximize your earnings as a Shipt Shopper, you can track your miles and claim mileage tax deductions.
Basically you deduct mileage from your income, which reduces your taxable income.
This kind of tax deduction is available for self-employed workers, freelancers, and small business owners.
As a Shipt Shopper, you can get claim mileage for the driving expenses when:
- Going to various stores to shop for customers
- Delivering customers’ orders at their locations
- Driving to and from your home office for Shipt shopping and deliveries
Note that the IRS considers trips to and from your house as commuting, for which you’re not allowed to claim tax deductions.
You can get around the rule by setting up a home office. To have your home recognized by the IRS, you have to prove that:
- You earn the more significant percentage of your income from there,
- Or that most of your administrative work is done from there.
If you can provide the evidence required, you will be allowed to claim tax deductions on drives to and from your home office working as a Shipt Shopper.
Methods of Claiming Mileage Tax Deductions
The IRS allows two different methods for small business owners and independent contractors (including Shipt Shoppers) to deduct business mileage.
Standard Mileage Deduction
This method is the best if it’s your first time to claim mileage tax deductions.
The Standard Mileage method gives small business owners and self-employed workers an easy way to calculate their mileage deductions.
You simply multiply your total mileage with the standard mileage rate (62.5 cents for the rest of 2022).
The standard rate mileage includes expenses such as gas, repair and maintenance, insurance, license fees, and vehicle depreciation.
Therefore, you aren’t allowed to deduct those expenses separately.
However, you can claim tolls and parking fees separately.
Most self-employed workers prefer using the Standard Mileage method as it is easy to calculate.
Actual Car and Truck Expenses
When you opt for this method, you have to track all the business-related auto expenses as an independent contractor.
Some of the most common car expenses include:
- Car insurance
- Lease payments
- Maintenance costs (such as tire rotations, oil changes, and replacing brake pads)
- Replacing tires
- Title, licensing, and registration fees (this isn’t deductible in all states, so check with your local tax office or a professional)
- Vehicle depreciation (calculate the total amount of your car’s depreciation and deduct only the percentage that applies to the business usage of the car)
The Actual Car and Truck Expenses method can be difficult to use without the help of a tax professional.
To choose a method that suits you best, calculate to find out which one will give you a bigger deduction.
Recording Your Business Mileage
To claim your business mileage as a Shipt Shopper, you will have to keep records of all your business drives.
Your records should also include:
- The cost of any repair and maintenance of your car
- Mileage for every business trip
- The dates you started using your car for business
- Total miles you’ve driven that year
You should also ensure that your business driving records are:
- Accurate – clearly calculated with a backup of all the details.
- Complete – showing the date, location, and mileage of each business trip.
- Timely – mileage records should be contemporaneous, which means that they should be created on the day of the drive, not later.
To ensure that your business mileage records always meet the above criteria, it is advisable to use a high-quality mileage tracker.
GOFAR is a user-friendly mileage tracker that offers automated tracking to give you an accurate log with a simple swipe.
GOFAR mileage tracker is easy to install. After purchasing it, all you have to do is plug the tracker adapter into your car’s diagnostic port.
Your mileage details and other relevant data will be sent to the GOFAR app on your smartphone.
The good news is that you can also claim a tax deduction on the cost of purchasing a mileage tracker.
Other Benefits of Using a Mileage Tracker
In addition to providing an easy and accurate way to record your business mileage, here are a few more reasons why you should get a mileage tracker:
- A mileage tracker can help you monitor your fuel usage. This helps you manage fuel consumption to maximize your profits. With GOFAR, you save 10% on each tank of fuel.
- GOFAR mileage tracker monitors your car’s health and sends alerts to your phone app if there are any mechanical problems. This makes it easier to spot and fix repair and maintenance issues before they become too costly. The alerts are sent in simple English, which you don’t have to be a car junkie to understand.
- GOFAR sends you automatic reminders when to renew your licence or insurance, and when your car is due for servicing. This can keep you safe on the road and save you from paying expensive fines.
- With GOFAR mileage tracker, you can also set speed limits alerts. This helps in keeping you safe on your business drives. You will also avoid speeding fines.
- A high-quality mileage tracker can monitor your vehicle’s emissions and give you feedback. This helps you minimize your environmental impact.
- GOFAR mileage tracker can help you check where you are parked, which can help you avoid expensive parking fees.
Track Your Mileage Like a Pro
Some people still use pen and paper or a spreadsheet to record their business mileage. But these methods are tedious and often inaccurate.
Inaccuracies in your mileage tracking can ultimately cost you a significant amount of money in tax deductions.
To have accurate and effortless mileage tracking as a Shipt Shopper, you should definitely invest in a GOFAR mileage tracker.
You don’t have to worry about GOFAR’s compatibility with your car. GOFAR is compatible with over 42,000 car models.
Additionally, GOFAR is IRS compatible, ensuring easy access to your mileage tracking details for a hassle-free tax deductions claim.
GOFAR mileage tracking app is available on both iOS and Android devices.
To become a smart Shipt Shopper, get your GOFAR mileage tracker today.