Thus the IRS's skepticism that a shopper doing that all the time is seriously trying to make a profit.
Although, there is slack cut if the only cause of the loss is the full mileage deduction, since that far exceeds the actual out of pocket. I believe the charitable mileage deduction of 14 (I think) cents per mile is closer to the estimated out of pocket figure.
If you're clearing the actual expense, even if not the allowable expense, it's consistent with a profit motive even if it doesn't actually create a taxable profit.
When you consider that the 56.5 cents applies to people driving gas guzzlers and Priuses alike, there's a lot of wiggle room in the interpretation.
I posted about a $400 profit to my tax return but estimate a $3500 return to my pocket for 2013.
And my point had to do with deducting expenses against a solo breakeven shop (throwing some in on a route, no problem). With any fee at all attaching to the shop, there is cash flow. With no fee at all, the shopper has set out on a guaranteed losing proposition -- not consistent with a profit motive.
The problem is we have shoppers on this board who are serious about making at least part of their living by shopping and there are people who are shopping primarily to get free stuff. There are different tax consequences; this is not a one-size-fits-all situation by any means. And you can put anything you want on a tax return and likely get away with it -- unless you get audited.
If you want to conduct yourself in such a way as to make yourself audit proof, you have to pay attention to these kinds of details. The IRS takes a dim view of people who call themselves a business when they really are not, just so they can deduct losses on their tax return.
So enjoy the free meals, but don't try to turn them into a tax dodge.
My point of view is that of a serious shopper and someone who has been self-employed for over 15 years -- as a tax preparer. I've taken classes in taxation and read auditor guidelines for one of the industries I'm involved in (livestock production, an area that is heavily audited because of the abuses) and I'm on the IRS's mailing list for bulletins every week. And with all that background there's a heck of a lot I don't know, just because the tax law is so complex. Everyone should go to the IRS website and do some clicking around and studying about being a small business and how and when deductions are allowed and what are the rules for mileage and meal deductions and home offices and then apply them to your own situation. Don't listen to what anyone here tells you, including me, until you have verified for yourself that the advice given applies to your situation.
I don't want to be responsible for you doing something wrong and getting nailed on an audit because you took something I said and ran with it without considering if it really applied to your circumstances.
Time to build a bigger bridge.