I just started mystery shopping this week and I'm loving it. Its the perfect second job. But I have a few questions about claiming expenses.

First and most important: Mileage. I read online that the reimbursement rate is .568cents/mile. Now when I factor in my mileage am I counting all the miles between my house, the store, and then back to my house?

Second: I was wondering if a few of you could throw out some other common expenses that you count as deductions. Seems like mileage is the big one.

Thanks,

Kevin

Also I'd like to throw in another question. Are the certifications worth the cost? Like if you have a gold cert, are you more likely to get things like high end restaurants?

It's .56 per mile. Last year it was .565

I count printer toner, paper, internet connection, and my cell phone bill. I've a dedicated tablet for MSing, and a dedicated laptop, as well as a home scanner/printer. Software which I purchased for MSing record-keeping. Video equipment and accessories, like additional power packs and mics. Shirts which were altered for video shopping. Those were all claimed.

Purchases above your reimbursement, as well. Like, say you had to purchase a burger, fry, and drink at Five Guys, but the reimbursement is only $11, and your purchase at even the smallest of those items, was $14.42. Because those items had to be purchased in order to complete your business evaluation, you are able to claim the additional expense past reimbursement, which is $3.42 in that example.

That stuff adds up. I've had retail clothing shops where they've only reimbursed $5, and you couldn't buy accessories or hosiery. Even scouting the clearance racks, the cheapest things I could find were $10-$12. Some shops require a non-return purchase, but provide no reimbursement. In those cases, that can be claimed as well.

Hotel stays on routes can be claimed. Meals on routes as well. Those are business trips. You'd not be making those trips if not for work.

Kevincwasik – Check out this thread: [www.mysteryshopforum.com], as well as a lot of the threads in this forum.

You have the right idea on how you're counting miles; however, be sure to not double dip your miles and exclude miles that are part of your normal commute to your full-time job (if you have one) and miles on "personal time."

How about this though. Say I have to drive 30 miles to get to a personal appointment I have, and schedule a shop close by the appointment. Can I count that mileage considering its not mileage to and from my regular job?

You'd track mileage from your home to your shop (30 miles) as business miles, for shopping. Then the additional, say, 2 miles, from your shop to your personal appointment would be logged as personal.

And you log ALL mileage. Personal, business, and commuter. But only the business miles are deductible.

BBird0701 Wrote:
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> You'd track mileage from your home to your shop
> (30 miles) as business miles, for shopping. Then
> the additional, say, 2 miles, from your shop to
> your personal appointment would be logged as
> personal.
>
> And you log ALL mileage. Personal, business, and
> commuter. But only the business miles are
> deductible.


This is something new to me; should I fill in the gaps with my commuter miles and personal miles? Shouldn't be too much of an issue since my commuter miles are exactly 4 miles to work and 4 miles from work, then everything else in between are personal miles. All I have specifically logged are miles for my mystery shops, audits, etc. with their actual starting and ending mileage for each project / assignment.



Edited 1 time(s). Last edit at 09/10/2014 04:39PM by Tarantado.

It helps to determine your overall business percentage use of your vehicle.

You can file your mileage under standard mileage rate or actual expenses. I've found I receive a larger deduction when they calculate actual expense deduction. You lose out on a lot by filing standard mileage rate. You can't deduct depreciation, tires, oil changes, or repairs or maintenance.

Huh. Interesting. Guess I have a few months to think about that one.

A lot of claiming mileage goes with intention. When you went to the personal appointment and then did a shop was your intention to do the shop and while you were there, go to a personal appointment or the other way around?

If I do a personal appointment and a shop on the way I go to google an work out the miles to the appointment and home and then how many additional miles it was to the appointment. I only claim the few miles to the appointment and not the total trip.

If it helps... start logging all miles. Business, personal, and commuter. You can purchase a 4pk of mileage logbooks on Amazon for about $6. Retain all receipts, including for new tires, oil changes, tolls, parking fees, etc. Honestly, I've found that getting into the habit of logging all miles means that I don't forget when to log.

When tax time comes, have them calculate your mileage both ways. Standard mileage rate, and actual expenses. Then file whichever works out best for you.

I have a weird situation, I think, because I have a full-time job which requires I put a lot of business miles on my vehicle. The situation became even weirder last year, when about 75% of my commuter miles became business miles. My work had me based out of one location, Military Base A, which is 9 miles from my house (I bought my house based on where I'd be stationed).. but when they became understaffed at Military Base B, 45 miles away, they started sending me there instead, on a temporary basis. "Temporary" is now at a year and still going on. I still have to check in at Military Base A every morning before heading on to Military Base B. It sucks, but there are provisions in place for it. Now, anything between my home and Military Base A are commuter miles. Anything from Military Base A to Military Base B are business miles. Same for the return trip.

I had no idea until my tax preparer pointed it out. Because I'd kept such good mileage records, I was able to claim a much larger deduction than I thought I would be able to.

BBird0701 – Interesting. Correct me if I'm wrong, if I go by actual expenses, I can properly deduct money spent on gas? If so, am I too far behind on documentation to go this route? What I mean by this is I haven't been keeping my gas receipts at all this year, though all my gas expenses are traceable per my credit card statements.

Thoughts?

Yes, you can. You deduct gas, tires, depreciation, licensing fees, registration fees, oil changes, maintenance service fees, repairs, tolls, parking.... pretty much everything that goes into or goes on with your car.

I'm not sure about whether or not you can switch, this late in the year. You can only file one way or the other.

BBird0701 Wrote:
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> Yes, you can. You deduct gas, tires, depreciation,
> licensing fees, registration fees, oil changes,
> maintenance service fees, repairs, tolls,
> parking.... pretty much everything that goes into
> or goes on with your car.


That's perfect. What's your experience on documentation? I have documentation on everything EXCEPT my gas receipts. This would have to be traced through my credit card statements. Would this type of documentation be sufficient to claim? Fortunately, I charge EVERYTHING on my credit cards, so I'll be able to backtrack with some of time, document filing and some of my analysis.

I'm not sure, honestly. I always retain my receipts. I would imagine that they would need an itemized receipt to show that it was gas that was purchased, and not a carton of cigarettes, for example.

There might be new guidelines for pay-at-pump gas purchases. It could perhaps be proven that you purchased at the pump,...maybe different authorization codes are used there vs. Inside. I'm really, really not sure, though.

You may be better off not going through the headache, this late in the year, and just start tracking actual expenses next year.

A lot also depends on the mileage your vehicle gets and how much of your miles are shopping vs. personal. Last year, I drove 27,202 miles total. 19,373.9 were shopping related. My vehicle gets 33mpg on the highway, so I came out ahead by using the standard deduction.

My vehicle gets 43+ mpg highway, and I still came out ahead filing actual expenses. I drove roughly the same amount as you. I think the main factor for me was that I had a lot of tolls and parking expenses last year. The year before that, I filed standard.

For many years now, the IRS has accepted credit card statements as receipts.

If you use mileage as your vehicle deduction, then you can not also use fuel, repairs or any other expense related to your vehicle. And in most cases you should use mileage, it will be more than the misc deductions and fuel.

I am no accountant so take my advice as it is...

I have talked to my accountant and here is what he has told me:

DOCUMENT, DOCUMENTS, and DOCUMENTATION - Get some cloud based service (like Google Docs) and keep track of EVERYTHING. Document all expenses you incur as a result of MS'ing. This includes mileage, internet, cell phone, computer/tablet expenses, clothes, car upkeep (in some instances), etc... If your MS provides you with any documents, save it out as a PDF and put it on the cloud (like Google Drive). Start a system where you can relate the documents together. It will make your life and your accountant's life easier.

DON'T BUY THE CASTLE - When I asked my accountant about purchasing a new computer for MS'ing, he told me that was ok. So I went out and bought a nice gaming-rig laptop. When I gave him the $2000 receipt, he flipped out. He explained to me that when I purchase a piece of equipment, I should not buy the castle, rather buy something that is going to get the job done before the item depreciates (about 4-5 years).

Quick funny story, after Apple announced the iPhone 6, my accountant texted me and told me, "NO, you can't write this off."

UTILIZATION TIME - I thought I could write the entirety of my cell phone bill since I use it for MS'ing, but again my accountant rains on my parade. You can only write off the "%" of time you use it for business. Again, this goes to documentation. Every month, I send over an "Utilization Report" to my accountant breaking down how much time I spent using my computer, phone, and office.

FEAR THE IRS - My accountant has said, "If you have nothing to hide, you have nothing to fear." I disclose EVERYTHING I do and buy to my accountant so in turn, he will protect me from the IRS. I have been MS'ing for a long time, and I have yet to be audited (mostly because I do stuff by the book.) If you are unsure of purchasing an item for your MS career, contact your accountant. He or she will steer you in the right direction.

anerrorhasoccurred Wrote:
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> I am no accountant so take my advice as it is...
>
> I have talked to my accountant and here is what he
> has told me:
>


I am an accountant, and you have a good one. He is doing his best to keep you on the straight and narrow.


The general rule for business deductions is that they are "ordinary and necessary" expenses for your business. Your gaming computer is not "necessary" for the business of mystery shopping.

A smart phone might be -- yes, even that 6S -- but then you have to look at did you buy it for the business or did you buy it to play with and might snap a picture or two with it on a mystery shop.

And then, as your accountant pointed out, some things have to be prorated -- what percent of your calls and texts are mystery shop related (very few, in my experience)? What percent of your time on your computer is spent entering reports versus posting on Facebook? I use my phone for several businesses; I don't write it off against mystery shopping because I already write it off against my accounting business.

If you weren't using it for business and couldn't write it off, would you have bought it anyway? If yes, it's probably not a business expense. There's your acid test. Don't buy a toy and try to figure "how can I write this off? I'll say I used it on a mystery shop" but if you buy a smartphone for mystery shopping, it's okay to also make personal calls with it. If you deduct 75% or less as a business expense, generally you will be okay.


Unless your car is new and you can take a lot of depreciation, *usually* you'll do better with the standard mileage deduction. It includes a component for your gas, tires, depreciation, repairs, insurance, and other incidentals based on annual averages. If you have a very expensive car, one that uses a lot of gas, or one that requires a lot of repairs, actual expenses may be better.

Keep in mind, when you sell a business vehicle, you have to figure gain or loss based on your "basis," which is the purchase price minus any depreciation you took. If you wrote off collectively more than you paid for the car, you may find yourself paying tax on the sale.

Best to run your personal scenario past a tax professional to make sure you are optimizing your tax situation. There are a lot of decisions that can only be made if you consider your entire situation, not just the mystery shopping part.

I have a cellphone that I use on almost all my shops (all photos for POV as well as my timing device). I can show that most of my data use is either for my email (sending proof of visit photos to the MS company or myself for reports) or my mapping program to get to and from, though I use still use the phone to occasionally call or text my family. I have an unlimited phone and text plan and the lowest data plan they offer (and never go over) so the price per month is the same no matter what. My bill does not itemize phone calls and texts due to them being unlimited and does not itemize data unless I go over which I don't (I see usage during the month from my phone to ensure I don't go over and use hotspots on the road as much as possible). I had been planning to deduct my cellphone bill at the end of the year since many of the jobs I go on require photos or an actual smartphone (GPS location stamped photos). Are you saying I have to keep some time of log for every call or text and actual GB used on data to divide up my bill?

OK. *Slight* change of topic. At least to a different type of deduction.

I *know* I could search the forum, but I'm having to use a borrowed computer for now, and my time online is really limited.

Our computer went kaput back around Memorial Day. Hence the borrowed computer thing. But, we can finally afford to get our own again. (Yay!)

So... I share the computer with my Dad. Use is probably 60/40, in my favor. Maybe even a little more to my end, unless Dad's working on one of his family newsletters. Also, of course, MS-related stuff is not the *only* thing I do on the computer. Is it for *any* of us?

Therefore, is any part of the expense of the new computer deductible as business expense? Same with the new printer we'll be getting?

Not an expert, but I'd say write it off.

BBird0701 Wrote:
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> I think the main factor
> for me was that I had a lot of tolls and parking
> expenses last year.

Umm. Tolls and parking expenses are separate from car expenses. Those are business expenses and independent of if you claim mileage or actual costs. If you accountant wasn't including those numbers in both cases then you need a new accountant.

bgriffin, I have always included those as business expenses. I've never had quite so many as last year, though, so, I said... "I think. " I have no idea what tipped the balances to actual expenses working better for me last year.

Last year, between work and mystery shopping, my car was figured at 75% business use. It was the first year actual expenses better for me, first year I filed actual for this car. She always told me to log all miles and expenses, though, just in case.

Right, my point though was that tolls and parking don't affect that. They're not relevant to the discussion of mileage vs actual expenses.

Right, but I took a stabbing guess at what could've pushed it over into actual expenses being better for me last year, and the only thing I could think of that was too different to why 2013 was different than 2012 was that I had an insane amount of parking expenses. I didn't know if they were factored differently when your vehicle becomes primarily business use, if it got lumped together since your vehicle itself is now primarily a business expense.

I will freely admit/accept when I'm wrong. I normally am.

Parking and tolls are deductible either way.

Lets say you deduct mileage and have 1000 miles and $100 in parking and tolls. You would deduct $100 as a business expense and $56 for mileage.

Lets say you deduct actual expenses and have $56 in expenses and $100 in parking and tolls. You would deduct $100 as a business expense and $56 in car expenses.

Parking and tolls are not included in either of the mileage or actual expense calculations. Actual expense would be depreciation, maintenance, gas. Parking and tolls wouldn't be included in that calculation. So having more of them last year shouldn't have influenced the decision.

I feel like I'm extremely tired and doing an extremely horrible job of explaining myself.