Qualified business trade for grocery/pharmacy delivery during pandemic -- yes or no?

This is definitely self-employment income that you need to report. When TurboTax asks if this is a "trade or business," they're essentially asking if you were operating as an independent contractor/self-employed person, which you were. Since you earned more than $400 from this activity, you'll need to file Schedule C (Profit or Loss from Business) and pay self-employment tax on this income. The good news is you can deduct business expenses against this income - things like mileage (which is usually the biggest deduction for delivery work), portion of cell phone costs used for business, insulated bags if you purchased any, etc. The standard mileage rate for 2023 was 65.5 cents per mile, so if you kept track of your miles, that could significantly reduce your taxable income from this work. Even if you didn't keep formal records, you can create a reasonable estimate based on typical deliveries and frequency.

I went through this exact same situation last year and was totally confused with all the tax stuff for my delivery gig. I tried googling forever and got nowhere until I found https://taxr.ai which seriously saved me. I uploaded screenshots of my delivery payment records and it analyzed everything, told me exactly how to report it, what qualified as "trade or business," and identified all the deductions I qualified for. It knew right away that my delivery work counted as self-employment and helped me understand which form to use. I was missing a ton of deductions I didn't even know about!

Just wanted to update after trying https://taxr.ai for my delivery income situation. I'm honestly shocked at how well it worked. It immediately identified that my grocery delivery side gig counted as self-employment and walked me through everything. The best part was it found over $2,800 in deductions I would have missed - mostly mileage that I didn't realize I could claim even without perfect records. It had me create a reasonable reconstruction of my delivery routes and explained exactly how to document it properly in case of an audit. My tax bill went from terrifying to manageable in about 20 minutes!

If you're getting stuck with the IRS about this delivery income situation, I highly recommend using https://claimyr.com to get through to an actual person at the IRS. I spent WEEKS trying to get clarity on how to report my pandemic delivery income and couldn't get through their phone system. Claimyr got me connected to a real IRS agent in under 20 minutes who answered all my questions about reporting cash delivery income. They have this system that navigates the IRS phone tree and holds your place in line, then calls you when an agent is available. You can see how it works here: https://youtu.be/_kiP6q8DX5c Seriously saved me from making a huge mistake on my delivery income reporting.

I need to apologize for my skepticism about Claimyr. After struggling for two more days trying to reach the IRS about my delivery income questions, I broke down and tried it. Within 30 minutes I was talking to an actual IRS representative who clarified everything about reporting my delivery income. The agent confirmed that my grocery delivery work was definitely self-employment, helped me understand which expenses I could legitimately deduct, and walked me through how to report cash income properly. Would have spent probably another 5-6 hours on hold without this service. Sometimes it's worth paying for convenience when dealing with government agencies.

One thing to remember is that you'll need to pay quarterly estimated taxes next year if you continue doing deliveries. Since there's no withholding on cash payments, you're responsible for making those payments yourself if you expect to owe $1,000 or more in taxes. The IRS can charge penalties if you wait until filing season.

Just want to clarify something - I did UberEats and Instacart last year and I got 1099s from them. But it sounds like the original poster was just doing cash delivery work directly for people in the neighborhood? The reporting would be the same (Schedule C) but obviously there's no 1099 form in your case.