The 1040 is what you want. 1040A is possible if your only income is from wages, salary and tips, interest, dividends and such. Self-employment (which is what mystery shopping is) is not one of your options. You need to be using a Schedule C to report your business income and expenses, and I don't believe that will feed into a 1040EZ either.
A copy of the Schedule C is available at [
www.irs.gov]
Here is how I do it:
Part I line 1. Put in every cent you received from every MSP whether it was fee or reimbursement, whether you got a 1099 or not. In line F at the top of the page you marked whether you were a "cash" or "accrual" or "other" taxpayer. You have to decide the first year whether you will report each year your shopping income as one of these types and do it the same way every year thereafter. If you are "cash" you are listing on line 1 all money you received on or before December 31st. If you are "accrual" you are listing all fees and reimbursements that you had on your books at December 31st whether you had received the money or not. I have chosen "accrual" for myself because it keeps all fees, reimbursements and expenses in the same calendar year just as my shop sheet shows.
I will have no entries on lines 2, 4 and 6.
In Part II line 9 is your vehicle expenses. Those start calculating in Part IV. For me the easiest thing is to fill in line 44--mystery shopping miles are a), I have no regular job so b) for me is bland and c) is my year end minus beginning of the year total. You need to take a look at the instructions and decide whether you want to depreciate your vehicle over time or just take the miles. I just take the miles and I am allowed to take tolls as well.
Line 22 is your paper and pens and such. When I purchase small equipment (under $250) such as a DVR, digital camera, computer monitor, thumb drives, memory cards for DVR and camera, wristwatch with stopwatch capability, back up external hard drive, etc. these I include with "Supplies" on line 22. If I buy a piece of equipment for more than $250 I need to look at depreciating it, though under current rules usually the entire expense can be taken in the year of purchase.
Line 25 is if you are taking a portion of your cell phone bill, your internet expense, etc.
Line 27 comes from Part V line 48 on the next page. In Part V my first line is "Reimbursed business expenses claimed as income" and that is all the reimbursements I got back. The second line I list as "Unreimbursed business expense". Those are just the words I use, there may be better terminology. The reimbursements I got from the companies are of course the first line, the unreimbursed is for example: I take a $12 flat fee gas station shop. I am required to buy at least $5 worth of gas and make an inside purchase. Because I can stop the pump at $5 and meet the requirement, that is all I will claim, even if I choose to put in $10 worth of gas. Whatever I buy in the store I will claim the actual cost or $1, whichever is lower,because $1 is a standard industry requirement. Since this is a fee only shop, my purchases will not be or have been reimbursed, so in this case I will claim on my shop sheet "Unreimbursed expense" of $6 or less regardless of how much I actually spent. I have never found other items that need to go in Part V, though it is available for expenses you can find no other place for but that can be legitimately taken.
About some of the empty lines: I can't imagine that we would have entries on lines 8, 10-16, 19, 24 or 26. If you got business licenses or paid tangible taxes for your business equipment, that would go on 23. If you had your computer fixed, that would go on 21. If your car was in the shop and you had to rent one for the day to do shops in a timely fashion, that would be on 20a. I purchased a buying club membership out out of my own pocket specifically to be eligible to do shops there, which I put on line 18, but most of these things are irrelevant to our kind of business.
Line 24 definitely does not apply to us, so do not attempt to put your vehicle use or your required meal shops in here! In fact none of your use of your vehicle belongs in Part II except where it pulls in on line 9 from Part IV, so do not put your car insurance in line 15 or your driver's license, vehicle inspections or annual title costs in line 23.
Because we are neither manufacturing anything or buying goods to be resold at a profit, Part III is irrelevant to us and is left blank.
So now you add up your expenses on line 28, subtract that from your receipts to get line 29, which is the profit or loss from your business.
Be very cautious about claiming an expense for business use of your home. There are strict guidelines that must be met to do this, including that the space is used for no other purpose. It would be up to you to prove that it was used for no other purpose rather than for IRS to need to prove that it was. If you own your home you would be needing to depreciate that space in your house and reclaim that value when you sold, so it gets much more complicated than it is worth.
Hope this helps. Happy Tax Time!