Not paid by company--is that a business expense?

Say I flake on something or the company flakes on something. I'm making up a scenario here because this hasn't happened (thank goodness). Say the MSC contracted me to visit an oatmeal cafe and spend $12.50 on breakfast. They reject the report (for whatever reason). So I can use that $12.50 as one of my work expenses?

Edited for leaving words out, as I always do for some reason.

Edited 1 time(s). Last edit at 12/07/2016 08:57PM by msmsmshopper.

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@msmsmshopper wrote:

Say I flake on something or the company flakes on something. I'm making up a scenario here because this hasn't happened (thank goodness). Say the MSC contracted me to visit an oatmeal cafe and spend $12.50 on breakfast. They reject the report (for whatever reason). So I can use that $12.50 as one of my work expenses?

Edited for leaving words out, as I always do for some reason.

If you flake, there should be a justified reason for claiming any expenses related to this shop.

If it's a rejection by the company, I typically note this on why I'm claiming the expenses incurred from this project as a loss.

Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 33 year old male and willing to travel!

A couple of accountants have told me that it's not deductible when a client doesn't pay. See: Not paid by company--is that a business expense? -
<[www.mysteryshopforum.com];

Note, there are several issues here.

Lets say that it is a reimbursement only job. You drive 20 miles total to perform the shop. The MSC rejected the shop. You are entitled to deduct both the mileage and your actual expense up to but not more than the amount originally agreed to as a reimbursement.

Lets say that it is a fee of $15 with a reimbursement of up to $5. You drive 20 miles total to perform the shop. The MSC rejects the shop. You are entitled to deduct both mileage and your actual exense up to but not more than the amount originally agreed to as a reimbursement. You are not allowed to deduct the $15 fee you would have earned had the shop been accepted.

Lets say that it is a fee only shop of $15. You again drive a total of 20 miles. The MSC again rejects the shop. You are entitled to deduct mileage and that is all.

Now lets say that the MSC accepted the shop and then went into bankruptcy and never paid you a dime. You treat it exactly as you would treat a rejected shop as outlined above.

@Flash wrote:

Note, there are several issues here.

Lets say that it is a reimbursement only job. You drive 20 miles total to perform the shop. The MSC rejected the shop. You are entitled to deduct both the mileage and your actual expense up to but not more than the amount originally agreed to as a reimbursement.

Lets say that it is a fee of $15 with a reimbursement of up to $5. You drive 20 miles total to perform the shop. The MSC rejects the shop. You are entitled to deduct both mileage and your actual exense up to but not more than the amount originally agreed to as a reimbursement. You are not allowed to deduct the $15 fee you would have earned had the shop been accepted.

Lets say that it is a fee only shop of $15. You again drive a total of 20 miles. The MSC again rejects the shop. You are entitled to deduct mileage and that is all.

Now lets say that the MSC accepted the shop and then went into bankruptcy and never paid you a dime. You treat it exactly as you would treat a rejected shop as outlined above.

Great detail, as usual.

What's your take on shops that provide a flat-rate fee where the MSC details that the fee includes enough to cover shopper-minimum shop expenses for the assignment with the remainder of the fee to be for the shopper's benefit. Some MSC's that do this includes Goodwin and Second to None.

If let's a a Smashburger shop was rejected, which paid a flat-rate $17 fee and the incurred shop expenses at the restaurant was $8, can the $8 spent to meet the minimum requirements for the shop be deducted as a 'loss?'

Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 33 year old male and willing to travel!

Flash is 100% correct.

I PERSONALLY would deduct the $8 meal at Smashburger, as it was a required purchase and I never received reimbursement for it -- plus the mileage rate for however many miles I traveled to complete the shop. I would keep my paperwork for the shop, including my note of the mileage involved and the receipt for the meal.

@Tarantado wrote:

What's your take on shops that provide a flat-rate fee where the MSC details that the fee includes enough to cover shopper-minimum shop expenses for the assignment with the remainder of the fee to be for the shopper's benefit. Some MSC's that do this includes Goodwin and Second to None.

When I go to perform a flat rate shop I anticipate a reasonable amount of expense to adequately perform the shop. So lets say--and I'll keep it abstract so everyone understands I am not commenting on a specific type of shop beyond it being flat fee--the flat fee is to be $20 and I am expected to make 2 purchases. I find it reasonable to spend $7 for my first purchase and $8 for my second purchase. I am anticipating this will leave a fee of $5 for my time and mileage.

Now in the normal course of affairs my spreadsheet would show $20 fee and because it is a flat fee shop, I will put $15 (the $7 + $8 costs) in the 'unreimbursed business expense' column. My spreadsheet will show my mileage for the shop as well.

The MSC does not pay me because they rejected the shop or they went bankrupt. I will change the fee column on my spreadsheet to $0 and in my 'notes' section will put the reason (i.e. shop rejected, wrong location, bankruptcy, etc.). Those are the only changes I need to make to my spreadsheet because the shop expense was 'unreimbursed business expense' to start with.

Thank you so much for these answers. Very helpful information.

Great responses.

I keep it simple. I use a budget app. I record all of my expenses related to each shop. Eventually I record my income as the total I am paid. I keep my mileage separately. If I am not paid I still show I had an expense and for non-expense shops I still have my mileage. It all comes together on my tax forms.

My posts are solely based on my opinions and for my entertainment, contact a professional if you need real advice.

When you get in debt you become a slave. - Andrew Jackson

Thanks! That does make sense that it all comes together at tax time.

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