What You’ll Learn Toggle What is Shipt?Can You Earn a Mileage Deduction on Your Shipt Mileage?What Are the Deductible Shipt Shopper Expenses?How to Write-Off Your Shipt Mileage ExpensesWhat is the Best Way to Track Your Shipt Mileage? What is Shipt? Image from: Shipt Shipt is a membership-based grocery marketplace that provides same-day delivery of fresh food and household essentials to its subscribers. Members can place their orders either through a smartphone app or the Shipt website. Members place orders from various retailers, which are then fulfilled by a Shipt Shopper and delivered to their doorstep. Shipt offers a chat function to ensure constant communication between members and shoppers. It also allows you to monitor your cart total to ensure you are not going over your budget. Real-time cart updates give subscribers the ability to add or remove items as necessary to stay within their budgets. Can You Earn a Mileage Deduction on Your Shipt Mileage? Presently, Shipt does not offer its shoppers a mileage reimbursement. But this is not to say that you cannot earn a mileage deduction on your Shipt miles. The IRS allows you to track your business miles and file a mileage deductions claim with your taxes at the end of the year. But first, you need to determine whether you are an employee or an independent contractor, as this will affect how you file your taxes. According to the IRS: “An individual is an independent contractor if the taxpayer has the right to control or direct only the result of the work and not what will be done and how it will be done.” Based on this, we can deduce that Shipt shoppers are independent contractors. As an independent contractor, you are responsible for filing your taxes and claiming a deduction on your business miles. You can do this using the Standard IRS Mileage Rate. Note, however, that to claim a deduction using the standard rate, you need to maintain a meticulous record of your business mileage and expenses. You can either do this using a physical mileage log, which is time-consuming and inaccurate. Or through a mileage tracking app. What Are the Deductible Shipt Shopper Expenses? As a Shipt Shopper, you cover 100 percent of your business costs. These expenses can eat into your earnings. Thankfully, you can claim deductions on these expenses come tax time to lower your tax obligations. To make the most from your tax rebates, you need to know what deductions you can claim. The IRS will not correct you should you fail to claim a deduction for which you qualify. Knowing your allowable deductions helps you maintain a more detailed expense record for your itemized tax deductions. As a rule of thumb, your deductions should include all necessary and ordinary expenses associated with your work. Unfortunately, gas is not among those expenses. The deductions you can claim include: Business Mileage Image from: GoSimpleTax Mileage is the highest cost you will incur as a Shipt shopper. Thankfully, it is deductible to the tune of 67 cents per mile using the Standard IRS Mileage Rate. However, the IRS is very strict about what you may claim as business mileage. For instance, personal commuting miles are NOT deductible. For this reason, it is vital that when you are tracking your mileage, you can distinguish between your personal and business mileage. You can do this through the use of an advance mileage tracking app like GOFAR. Vehicle Maintenance Your car is a crucial piece of equipment immediately after you become a Shipt shopper; this makes general maintenance and upkeep deductible. Vehicle Registration Some states base vehicle registration on the value of the car rather than the weight. You may be able to deduct part of your registration fee in such a state. Look into your state’s regulation on vehicle registration to make sure you are eligible for this deduction. Parking Fees and Tolls Keep track of your parking fees and tolls as you can claim them on your taxes. Note, however, that parking tickets and traffic infractions are NOT deductible. Car Payments If you buy a new car and pay it off by working as a Shipt Shopper, you can deduct a part of your car payment proportional to its business use. Eco-Friendly Car Credit The federal government and some states offer tax credits for certain electric and hybrid cars. You can claim up to $7500 in credit for a qualifying vehicle. Visit Fuel Economy website to find out if your car is eligible. Roadside Assistance Image from: Pxfuel The cost of AAA, and any other roadside assistance programs are deductible. After all, staying safe on the road is also part of the job. Additionally, you can claim deductions on expenses like: Phone and Service As a Shipt Shopper, one of the tools you need to do your job is your cell phone. Therefore, you can write off part of your monthly cell phone bill as a business expense. Health Insurance Your health insurance is 100 percent deductible. Additionally, you can write off expenses such as glasses and nonprescription medications. Tax Advice A tax advisor is an invaluable asset when filing your taxes. A qualified tax advisor can help optimize your tax returns for maximum deductions. They help ensure that all your forms and claims are in line with IRS regulations to avoid any rejected claims or conflict with the IRS. Best of all, as a Shipt Shopper, you are an independent contractor, meaning you can write off your tax advisor fees as a business expense. How to Write-Off Your Shipt Mileage Expenses The IRS allows for two methods to deduct your business mileage and associated costs: The standard mileage method The actual expense method Whatever the method you choose, you will still need an accurate record of your business and personal miles. Standard Mileage Method Using the Standard IRS Mileage Rate is the easiest way to work out your mileage deductions. Here, you multiply your total deductible business mileage with the standard IRS rate for the year. (67 cents per mile in 2024) For example: If your deductible business mileage is 10,000 miles then: 10,000 miles x $0.67 per mile = $6,700 due in deductions. Keep in mind that to use this method, you need to have used it in the first year you used your car for work. After the first year, you can switch back and forth between the standard mileage and actual expense method. If you did not use the standard mileage method in the first year, then you can only use the actual expense method henceforth. Also, you cannot use the Standard Mileage Rate to claim a mileage deduction after using any depreciation method under the Modified Accelerated Cost Recovery System on your car. This applies if you claim a Section 179 deduction on your car. Actual Expense Method The actual expense method is the most accurate way to work out your mileage deductions. Here, you track all your allowable mileage and expenses and claim them in an itemized tax deduction. Some of the allowable expenses include: Gasoline Vehicle Insurance Vehicle maintenance and repairs Interest on your car loan Vehicle registration fees Depreciation After working out all your car expenses for the year, you then multiply the amount by the percentage for business use of your car. That is, your business mileage for the year divided by the total miles for that year. For example: If Your total car expenses are $10,000, Your total miles for the year are 50,000 Your total business miles are 20,000 Then, 20,000/50,000 = 0.4 $10,000 x 0.4 = $4,000 (the amount you can claim in your deductions) What is the Best Way to Track Your Shipt Mileage? Business and Mileage Tracking– GOFAR Everything you need all in one App. Mileage deductions are an essential and lucrative source of income for Shipt Shoppers. And to take full advantage of your mileage deductions, you need an exceptional mileage tracker that will accurately record your data without much hassle. GOFAR offers precisely that! It is an automated mileage tracking app with seamless mileage and expense tracking. GOFAR gives you the ability to track all your mileage and tag business and personal mileage to distinguish between the two. It offers you the ability to track and schedule your vehicle maintenance and repairs for easier expenses tracking. Best of all, GOFAR is IRS compatible and comes with easy access to your current expense claim summary. Visit GOFAR today to learn more about their pricing and offers, and never again have to worry about your mileage deductions.