IF you do a reimbursement shop only (ex-caliber grocery stores).....do you have to claim that $14 as income?

I'm not sure, but what I do is claim it as income, but then I use an offsetting expense for "required purchase" of the same amount to that the net income is zero.

Flash started a great section about taxes in the New Mystery Shoppers area. It's one of the stickys and it goes into great detail about reimbursements and expenses and other tax stuff.

My tax preparer (H&R Block) didn't even figure in the reimbursement only shops because they end up being a wash. My problem is/was those shops that require a purchase of some sort but pay a flat fee. There is an organic burger shop that pays a $14.00 flat fee. You are required to order a burger, fries (or healthier side option) and a drink. It usually comes to $10-something for one person. The remaining money is my "profit."

In my Excel spreadsheet, I have been putting the flat fee payment in my shop fee column, not the reimbursement column. I do record how much I spent on the shop but again, I am getting paid a flat fee. I didn't realize the discrepancy until I started to prepare my 2012 taxes. But for less than $4.00 a handful of times in a calendar year, I didn't sweat it. I am going to try to tweak the situation for 2013 though.

On those flat-fee shops that require a purchase, I put whatever is left over of the flat fee in my "fees" column, and what I spent in the "expense" and "reimbursement" columns (so they balance each other out). Then I have a total of the "fees" column entry and the "reimbursement" column entry for my "Total Due" column.

StormCloud Wrote:
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> On those flat-fee shops that require a purchase, I
> put whatever is left over of the flat fee in my
> "fees" column, and what I spent in the "expense"
> and "reimbursement" columns (so they balance each
> other out). Then I have a total of the "fees"
> column entry and the "reimbursement" column entry
> for my "Total Due" column.


That is exactly what I was thinking. I just didn't even realize this accounting error until April 15th of this year. I'll be able to make my revisions for 2013.

Most of the companies I worked for last year included the reimbursement as payment. If they do not distinguish, it doesn't seem like it comes out even for me. My tax preparer did not even ask for my receipts. Just said it comes out as a plus and a minus, so it wasn't counted. It seems like the reimbursement would at least be subtracted from the gross income.

kyninja, reimbursements are not income and the amount does matter. You should report an amount as income that includes both fees and reimbursements. Then, you should list reimbursements as a deductible expense. Your tax professional does not need to see your receipts, but does need to be given a number by you that represents your reimbursed expenses.

kyninja, what you described sounds to me like your tax preparer may have made a mistake or not understood something. If, for example, your shop fees and bonuses total $3000 and your reimbursed expenses were $300 and your total 1099's are $3100 (because only one of the MSC's included reimbursements on the 1099) you should report your income as $3300 and deduct $300 as a business expense on your schedule C so you pay tax only on the $3000 that was the fees and bonuses. (Except from that you will also probably deduct $2900 in mileage expenses if you're like most of us).

If your tax preparer put $3100 on your return because that's what was on the 1099's and didn't ask you what your expenses were, then that was wrong. (They don't need to see the actual receipts, they just needed the figure you totaled up from the receipts)

For flat fee shops with a required purchase that is not reimbursed, that is a required purchase. When doing your taxes, you have your income as what is listed on a 1099 (if you receive one) OR make sure you keep good track of what you are paid each month from all companies. On your Schedule C, you will put in all of the required purchases (food, groceries, etc) as expenses.

It makes it a lot easier if you have a good detailed spreadsheet. Years and years ago, I bought the Mystery Shopping Bible (I don't like the title of the spreadsheet, but that's what it is). It is actually WONDERFUL and many of the different worsheets work together with formulas so you don't actually have to add up everything yourself.

DevaSSE Wrote:
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> For flat fee shops with a required purchase that
> is not reimbursed, that is a required purchase.
> When doing your taxes, you have your income as
> what is listed on a 1099 (if you receive one) OR
> make sure you keep good track of what you are paid
> each month from all companies. On your Schedule
> C, you will put in all of the required purchases
> (food, groceries, etc) as expenses.
>
> It makes it a lot easier if you have a good
> detailed spreadsheet. Years and years ago, I
> bought the Mystery Shopping Bible (I don't like
> the title of the spreadsheet, but that's what it
> is). It is actually WONDERFUL and many of the
> different worsheets work together with formulas so
> you don't actually have to add up everything
> yourself.


I have and use the MS Bible also because I don't know Excel well enough to start something from scratch. For flat rate shops with a required purchase, I have been putting the flat fee in the shop fee column and the required purchase amount in the purchase amount column.

One of the other posters said that I should subtract my purchase amount from the fat fee amount and only show that as my payment in the shop fee column and then the amount I paid under the reimbursement amount column. It sounds like you are not agreeing with this method. Or am I misunderstanding one of you?

P.S. I just had a back procedure performed yesterday so I am still on pain killers. Please be kind.

Hope you get to feeling better soon, Shop2Live.

Shop2LiveinFL Wrote:
-------------------------------------------------------
> My tax preparer (H&R Block) didn't even figure in
> the reimbursement only shops because they end up
> being a wash. My problem is/was those shops that
> require a purchase of some sort but pay a flat
> fee. There is an organic burger shop that pays a
> $14.00 flat fee. You are required to order a
> burger, fries (or healthier side option) and a
> drink. It usually comes to $10-something for one
> person. The remaining money is my "profit."
>
> In my Excel spreadsheet, I have been putting the
> flat fee payment in my shop fee column, not the
> reimbursement column. I do record how much I
> spent on the shop but again, I am getting paid a
> flat fee. I didn't realize the discrepancy until
> I started to prepare my 2012 taxes. But for less
> than $4.00 a handful of times in a calendar year,
> I didn't sweat it. I am going to try to tweak the
> situation for 2013 though.

For flat fee shops, I have the shop fee in both the total amount and reimbursement columns, but put what it cost me to do the shop in an OOP (out of pocket) column next to it. If it's a wash, I don't sweat it, but as example, I would account for a $26.00 shop where I would have to spend $10.00 to eat, regarding the overall fee as income, and then deducting $10 as an expense.