Not a specific dollar amount, but when all is said and done, what percent of your earnings to you actually end up paying taxes on after expenses? I was looking at my mileage tracker and since I live in a rural area, there are a lot of miles on there to do shops. The mileage deduction would negate taxes for me this year. When I was self-employed at another job before I retired, my mileage and expenses put my effective tax rate in the 5% range and I was estimating similar results doing mystery shopping. What has been your experience?
Remember, if you Schedule C income is zero or negative too many times in a 5 year period, your business may be reclassified as a hobby by the IRS and prior years' returns denied all deductions that you took.
For more info, please hop over to the New Mystery Shoppers area of the forum and read the "sticky" thread about taxes.
Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel
Go read on the irs website about self-employment deductions. There have been recent changes in some of the information.
I showed a couple hundred dollars of shopping income last year by only claiming "additional" miles. A lot of my mystery shopping I do while running other errands. I keep track of which miles I drove only because I had shops, and which miles I would have driven any way. (I might plan a day of mystery shopping on the way to a doctor appointment 100 miles away, for instance. I can choose to call those work miles or medical miles or split them between the two activities.)
If you read the small business information on irs.gov you'll have a better idea of how this all works and what options you have.