Why Instagram removes your line breaks
Instagram can trim trailing spaces and collapse empty lines in a caption, so carefully spaced paragraphs turn into one block of text. It happens most often when a caption is pasted from another app.
This generator puts an invisible character on each empty line. Instagram does not see it as whitespace, so the empty line stays.
How to add line breaks to an Instagram caption
Write or paste the caption on the left, with blank lines exactly where you want them. Copy the version on the right and paste it into Instagram. Spaces at the end of lines are removed, as are empty lines at the very start and end.
A common pattern is to put hashtags below a few spaced lines so they sit out of the way under the More link.