1099 questions, please

1099 questions, please

One of the MSC reimburses for the product purchased during the shop. Not all of their shops require purchases. I know they won't send you a 1099 unless you make over $600.

Does the 1099 break down whether it is a fee or reimbursement?
Or are reimbursements included in the total amount?

I guess this is the same question. If you earn, say, $502 in fees and are reimbursed and additional $100 for purchases, will they send you a 1099?

Trying to figure out which 1099's I need to be scouting for next month. Thank you in advance for your assistance!

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More About Mystery Shopping Taxes

If you keep your records correctly, you don't need to worry about whether you got a 1099 or not. You don't need the 1099 to file your return; all you need is your total income and breakdown of your expenses.

Yes, on the tax software they ask for the 1099's and you can input them if you want. But all that gets transmitted to the IRS is the total income. They compare the total income you report to the total income reported on 1099's and w-2's. As long as A is equal to or greater than B, they're happy. they don't care how you get to the figure you report. If you get audited, they will look at details.

In other words, you don't have to wait until you have all your 1099's to file your return. Keep your records as you go. The only time there might be a problem is if they put something on a 2014 1099 that you didn't actually receive until 2015. You don't have to declare it unless you had access to the money in 2014. I got a letter from them once when a 1099 included a check they had issued on December 31 but I didn't receive until january 5. I simply explained the discrepancy and said the missing amount would be reported on the following year's return and that was the end of it.

Time to build a bigger bridge.

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In my experience, the better MSC's do not include the reimbursement amounts on the 1099, but the key thing is for you to be keeping good records, including mileage and other business expenses.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

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so I can print out my paypal for the year and toss it at HR Block and let them have fun?

Just lost trying to find a fire pit in a concrete jungle wishing it was a wooded glen...

if it wasn't for bad luck, I would have no luck at all

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No, I beleive that PayPal reports total payments made. They do not break out fees and reimbursements. And without giving your accountant a list of expenses (reimbursements, unreimbursed expenses, mileage, other business expenses) they will have to report the total as income. You need to be able to subtract expenses. PayPal does not track your expenses.

Personally, I think that you need to go somewhere other than H&R Block.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

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You could certainly do that and you'll likely pay more income taxes than is necessary. Better to keep a spreadsheet with all your info and give a good accountant the data. I'd recommend using someone other than a tax preparer at a franchise. You may not be getting the most experienced or qualified person. I used an accountant for years when I was a commissioned sales person, then went to Turbo Tax when I was an employee again. This year I'll have a blended income and some other complications - so I'll gladly shell out the money to a CPA and rest much easier.

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The best thing to do is keep up with all income from fees and all income from reimbursements separately. Then you know where you stand on your numbers and you're not depending on 1099s to break things down for you (which they won't in most cases). You don't need the 1099s to do your taxes. The IRS gets copies of the 1099s but what you need to report is your total income. After you deduct all the business expenses to which you are legally entitled, you won't have much profit from mystery shopping. If you do, you're not figuring your mystery shopping/auditing net income correctly.

Mary Davis Nowell. Based close to Fort Worth. Shopping Interstate 20 east and west, Interstate 35 north and south.

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Thank you, everyone!
Yes, I've been tracking the fees and the reimbursements, plus other business expenses.

Someone mentioned Paypal....I know my bank send me a form for my interest from savings accounts, etc. Does Paypal send anything? I don;t receive interest from them. Why should they send a 1099 or whatever form?

Thanks again!

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Under current IRS rules, if you receive money from MSC's through PayPal, then PayPal is responsible for sending you the 1099 form, not the individual MSC's. They will aggregate the total amount of money they sent you all year onto a single 1099 form.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

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Thanks for the answer about Paypal!

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It is only for the FEES not reimbursments, because that is not considered earnings.:-)

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PayPal is only informed of the total amount of the payment to be made each time. They have no idea why the payment is made. That is why you have to keep track of fees and reimbursements yourself.

Look at one of the emails sent from PayPal when you get paid by an MSC. Only the total dollar value is shown. No categories.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

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So.if all the MSCs pay me a total of $601 (fees/reimbursements) within a year's time, I will receive a 1099 from Paypal saying that I have been sent that much money from the MSC's, right?

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PayPal only sends a 1099 form for payments they sent you. I think that is what you meant, but you said "all the MSCs" and to me, that would include ones which pay you by check, by direct deposit, by PayQuicker. Just so that there is ambiguity, PayPal only reports payments made through PayPal.

Each of us is responsible for reporting payment from each MSC even if the amount is less than $600 and no 1099 is sent.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

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I am well aware of my responsibility to report payments from each and every MSC whether it is a penny or a $20,000!
THAT has never been part of my question!

There is no need (at least for me) for that responsibility to be reiterated in so many posts. (Some of y'all aren't reading each other responses, I guess, because of the repetition. It's understandable for that statement to be made a couple of times, but GEESHHH!!!) I'll have to tell my cousin who is an IRS-investigator about all the warnings that all of you want to make sure that I don;t get in trouble or try to pull a fast one. If someone takes offense about my comments in this paragraph about the repetition, let me remind you that those comments didn't deal with my original post. So..get over it!

The question dealt with the break-down (if any) on the 1099's from those MSCs from which I collected $600 or more, if the reimbursement amounts affected whether or not a 1099 was sent...and later about Paypal's practice regarding the MSCs THAT paid me through Paypal.

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I can't be the only one that gets tired of that repetitive warning being posted so many times in different threads, especially when that is not the subject of the question!

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The reimbursement money should not be included in the amounts reported on the 1099s; it should only include actual earnings. With that being said, I have heard of people of the forum saying that they have had instances where their 1099s from certain MSCs DID include their reimbursements (erroneously, of course). Because of this, I don't rely on the 1099s and instead use my spreadsheet for the year to determine the total that should be reported for each MSC.

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Thank you, Tlt14. I always double-check my spreadsheets and records against my 1099's. I am a free lance writer and found one newspaper padding its books by claiming a much higher payment to me that what I received. That paper didn't stay in business long...

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PayPal will send you a 1099-K only if you receive more than $20,000 from all sources and you receive more than 200 individual payments. It won't break down where you got the money. If you do get a 1009 from PayPal, some of the same income may also be reported on 1099s by the MSCs that use PayPal. The IRS knows this is happening and you won't get double-taxed, but it does underscore the importance of keeping keeping track of your own income.

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mystery2me, thanks! I was wondering about the chance of being double-taxed! I don't mind paying my taxes, but I just want to pay my fair share. Thanks for the input!

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Researcher,

You specifically mentioned the $600 figure in your opening post. We have had countless members over the years believe that if they did not hit that $600 figure, hence the multiple warnings. I actually thought that was what you meant when I read the original post. It may not have been your question, but it absolutely related to your original post. Though you asked the question many others will come along later to read, so it is important to be clear as the US tax code effects many of us. I actually saw very little repetition in this thread.

With regard to your original question, I would not trust a 1099 from anywhere to be correct when it come to separating reimbursements and fees. Many do, but not all of them.

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