last april, i requested a tax extension, so that my 2011 tax forms aren't due now until november 2012. i just want to make sure that i'm filing everything correctly.

so anyway, i was sent a 1099 from one mystery shopping company (research services group) that shows an amount paid to me for the year 2011. however, no other mystery shopping companies have sent me 1099s. why not?

therefore, i went to my local IRS office directly to get a print-out of all 1099s that they have in their records that were sent to me. apparently, 10 other mystery shopping companies that i have worked for were not recorded as having paid me anything for 2011. only 1 in 10 of the companies that i have worked for sent me a 1099.

i have a paper record that shows all 2011 payments to me from companies that are recorded with the IRS. are mystery shopping companies required to report these payments to the IRS? or maybe it's just somehow specific to my home state?

Edited 1 time(s). Last edit at 06/26/2012 01:15AM by vince.

If you earn $599 or less, they are not required to send you a 1099. Since contractor payments are deductible for them, I would count on them reporting it somewhere.

Stay safe, report it even if they didn't. Not worth it not too.

vince Wrote:
-------------------------------------------------------
> last april, i requested a tax extension, so that
> my 2011 tax forms aren't due now until november
> 2012. i just want to make sure that i'm filing
> everything correctly.
>
> so anyway, i was sent a 1099 from one mystery
> shopping company (research services group) that
> shows an amount paid to me for the year 2011.
> however, no other mystery shopping companies have
> sent me 1099s. why not?








>
> therefore, i went to my local IRS office directly
> to get a print-out of all 1099s that they have in
> their records that were sent to me. apparently,
> 10 other mystery shopping companies that i have
> worked for were not recorded as having paid me
> anything for 2011. only 1 in 10 of the companies
> that i have worked for sent me a 1099.
>
> i have a paper record that shows all 2011 payments
> to me from companies that are recorded with the
> IRS. are mystery shopping companies required to
> report these payments to the IRS? or maybe it's
> just somehow specific to my home state?


Do not confuse payments with reimbursement.

If you buy tools (food you must purchase to give a client a report on the experience) for example, It is not taxable income as you had to buy and consume the food to properly report. You did not get enjoyment as you were working and most likely had restrictions on the food you had to buy.

If you made even $1.00 from a company, report it. I count all payments as income. I then count reimbursements as part of my expenses. Every cent is counted.

LisaSTL Wrote:
-------------------------------------------------------
> If you earn $599 or less, they are not required to
> send you a 1099. Since contractor payments are
> deductible for them, I would count on them
> reporting it somewhere.

yes, only one company paid me more than $599 for 2011. where do the others actually report it then?

vince,
Those MSCs report all payments to shoppers as expenses on the company's tax return. Although they do not itemize that report by shopper, if they are audited, they will be able to show to whom each dollar was paid.

It is up to YOU, by law, to report to te IRS the fees that were paid to you from any MSC, regardless of the amount that they paid you. You are the person required to keep records of your income from any company that pays less than $600 and report it.

Do you have to report each payment separately for each MSC? Or do you lump all monies made from MS'ing into one lump sum?

For example...
Company A - Performed XX shops for $XX.XX
Company B - Performed XX shops for $XX.XX
Company C - Performed XX shops for $XX.XX

Or...
All earnings from MS'ing = $XX.XX

You can lump together all of those that did not send a 1099. The IRS wants the 1099s reported sperately, I think. If you use a tax filing app, it will pop up a place to list the source of each 1099.

The pop-ups will tally the 1099's and add a worksheet for it, but ultimately, the IRS just wants to know the sum of how much $$ your business took in.

If you know the number, you can enter it directly without inputting all the 1099's.

walesmaven Wrote:
-------------------------------------------------------
> vince,
> Those MSCs report all payments to shoppers as
> expenses on the company's tax return. Although
> they do not itemize that report by shopper, if
> they are audited, they will be able to show to
> whom each dollar was paid.
>
> It is up to YOU, by law, to report to te IRS the
> fees that were paid to you from any MSC,
> regardless of the amount that they paid you. You
> are the person required to keep records of your
> income from any company that pays less than $600
> and report it.

okay, thank you. i am reporting it all, but i wasn't sure exactly how to do it, since only one company sent a 1099. i got a tax extension until november, so that i could do it correctly.

The advice to declare all of your income, whether or not you got a 1099, then deduct all of your expenses is absolutely correct.

Just an FYI--the extension gives you until October 15, 2012 to file, not November. It is possible to apply for a longer extension, but it is not automatic. The six-month extension is yours for the asking.

Is that the mystery shopping author Cathy Stucker in the forum? Or is it a poser? ;-)

Should I identify myself as "TheRealCathyStucker"? ;o)

Yes, I am the author. I don't get here often, but I pop in to various forums from time to time.

It's important to note that if you do request an extension, and you owe taxes you still have to pay them by the April deadline or you will face interest when you eventually do file.

If you are getting a refund, the irs does not mind if you wait : )

CathyStucker Wrote:
-------------------------------------------------------
> The advice to declare all of your income, whether
> or not you got a 1099, then deduct all of your
> expenses is absolutely correct.
>
> Just an FYI--the extension gives you until October
> 15, 2012 to file, not November. It is possible to
> apply for a longer extension, but it is not
> automatic. The six-month extension is yours for
> the asking.

thank you. i should have it all done within about a month from now.

I was wondering what the dollar amount was that mandated that the MSC send a 1099. Also, I didn't know you could go to the local IRS and have them print off what 1099's were sent to you...You know how the mail is...Thank you!

The company will send you a 1099 at $600. All money paid out to you by the MSC will be reported to the IRS whether or not they issue you a 1099. The difference is that with the 1099, the money is specified as having been paid to you. Without the 1099, it is lumped in without identification with all other shopping fees paid out. Remember that if you do not receive a 1099 and the company is audited by the IRS, you could still be identified as receiving funds and might possibly be audited as a consequence of that audit.

I pulled this POST up for two reasons. One being CathyStucker's post to a current post and her post to this subject.

This post poses a question of mine regarding, posting income, on the tax form without obtaining a 1099 and without filing a Schedule C. I do not consider MS as a business........so where do I include the income on a tax form? Generally I have been placing the "income" under interest income b/c there did not seem to be anywhere else to place it.

The difference between a "refund" and "amount owed" is a matter of $20. I don't care where it goes on the form but I am asking b/c the form wants to include my car as an asset but I don't want to. If there is a proper place for this "income" to go, I'll put it there. But this is not a Business for me.

Although this "income" is DD. I remove my reimbursements from the account each month. The total in the bank is from MS, based on annual deposit. That is why I place it under the taxable income in the interest column. Where else would it go if one does not receive a W2 or a 1099?

If the company gets audited , I still have my papers. Just wondering, the time is close.

Do shoppers need a 1099 Misc?

Mystery shopping is self-employment income with shoppers working as independent contractors. The IRS considers it a type of business with you contracting out your services. If you earned more than $400 you have to pay 13.3% on whatever you earned doing shops towards self-employment taxes (10.4% for Social Security and 2.9% for Medicare). You ALSO have to pay income tax.

Here's some links with info:
[www.irs.gov]
[www.irs.gov])

Edited 1 time(s). Last edit at 04/06/2013 12:32AM by rainy.

Sojo917, it doesn't matter whether or not you consider MS to be a business. The IRS does. You need to submit a Schedule C with the total you earned from MS, less your expenses. The difference is your profit, and you may owe both income tax and self-employment (Social Security/Medicare) tax on the profit.

Do not declare it as interest income. The Schedule C is no big deal, and it is the correct way to declare your income.

The IRS doesn't have a sense of humor about this.

If you do not consider MS a business, then you would consider it a "hobby" under IRS guidelines. Why this matters is because you can deduct business losses from your other income. In other words, if you "lost" money while mystery shopping, you get to deduct that from other income, which would lower the taxes you have to pay. With a hobby you do not get to deduct any losses.

Schedule C is the correct form, as Cathy stated. Might I add that if you do not show income, there is no self-employment tax to pay. There might not be any income once you deduct mileage, a portion of your Internet access, a portion of your phone bill, and any other equipment or space you use to manage your mystery shopping business.

Now, if you do show losses continually (more than two of the last five years), that pattern would establish this as a hobby in the eyes of the IRS.

See [www.irs.gov]

I'm not a tax pro. I did have a field audit a few years back where my mystery shopping as a business versus hobby was questioned. I was able to produce a mileage log and had to explain exactly what I did, but ultimately the agent accepted my return and all its wonderful deductions.

everyone is correct anything up to $599 no 1099 is sent... cover the issue of taxes on my ss earnings thru my 4 part time merchandising jobs (I am a w-2 employee w/all 4) I have extra $ withheld from each one if any company is audited and I fall into that lumped category and am the lucky one to be audited as the consequence I have the 13.3% covered..

sojo, may I suggest if you have this many questions about this, and this much misunderstanding of definitions and general tax concepts (i.e., the fact that just because it's in your bank account does not mean it is "interest" that you should go to a qualified tax preparer (doesn't need to be a CPA) and have them explain things to you? There are way too many factors here to try to wing this by yourself. Once a tax preparer has done a correct return for you, you can use that return as an example for future years if you want.