the government will want to see a reasonable effort to compute your business usage. Scroll through your "recent calls" list; how many are friends and family versus work-related?
I have been told, although I do not know this authoritatively, that the IRS might question a "business percentage" of more than 75%. So if your figure is less than that, and you can show how you came up with it, they should accept your percentage. you would apply that percentage to the phone purchase, any accessories -- cases, charging cords, insurance plans, and the monthly fee.
If you have a bundled plan (cell phone, internet, and TV) you'll need to know what percentage of that monthly bill is for the cell phone plan.
Do the same thing with your computer and internet usage. Compute the figure of how many hours you spend searching for and entering shops and compare it to how many hours in total you use the computer.
Be conservative. Keep a record of your computation (doing the math a couple times a year would suffice).
And if you have a second phone or computer you bought just for business, you can take 100% of that. I have a desktop computer used 100% for my tax and accounting business, a laptop I search for jobs on and also play a Facebook game and read personal email, and a second laptop I bought just for mystery shopping that lives in my car.
The first computer is written off against my tax business, the last one against my mystery shopping business, and the other one is allocated between business and personal.
Agree with dspeakes. I allocate a certain portion of my phone and internet to mystery shopping. It is based on a realistic estimate of what I use. I tend to not be real conservative with the estimates since I figure the IRS is not really interested in my piddly amount.
Oooooooo! Glad I read this chain! I just used my mystery shopping money to buy me the new Samsung Galaxy Note 4 Edge and I can write off a good portion of that. PC and laptops are paid for, but I can write off a portion of the internet use.
When you learn, teach, when you get, give. Maya Angelou
If I didn't mystery shop I wouldn't have a cellphone as I never use it for personal use. Even though, it's only used for mystery shopping I only claim 80% because it's very difficult to prove you don't use a cellphone for personal use.
This is great and helpful information. I do phone shops and use my cell phone and bluetooth bud to do them. I would be very conservative on what I wrote off. I would rather error on the side of less rather than more.
Wow CureMS, you went right to the top of the line
with that smartphone. Enjoying the edge display?
Roll-up phones are not too far behind.
= + = + = + = + = + = + = + = + = + = + = +
There are no stupid questions, but there are a lot of inquisitive idiots
When you try to please everybody, you end up pleasing nobody
I am a tax preparer. I also do shops and webpages (for full disclosure.) I am disabled and work at home.
If the purpose of your cell is to be used for work, yes, take the cell phone off your income taxes. Best to have a separate cell dedicated to only work use. Get a new cheapo for personal and use the good one you now have for business. You can write your cell expense and other business related expenses on Part V of IRS Schedule C for "Other Expenses." Write the total cost of your business cellphone bills for the year in the far right column of the expense line. Add the price of your phone and any other expenses associated to it on line 48. You can also take off mileage directly relates to your business actions. For 2013 you get 56.5 cents per mile, for '14 you get 56 / per mile. You must claim all income made by shopping to get all deductions. You do not get the cost of the gas and the mileage deduction. The best way to loose an audit is to try tricks. Be honest, be smart and make money, eat, etc as a natural course of business.
When these companies send you the little 1099 forms in the mail, the IRS got a copy. Mama knows . Any payments over 600 bucks in a calendar year will get you a 1099. Many will do 550 with one company and 550 with another company thus missing that 600 amount. I recommend just being upfront.
BE SURE that you check your "profile" to be sure that your mailing address is correct with any company that you have shopped for. If your address is not correct, Mama (IRS) still gets their copy whether you do or not. Be sure that the companies that you shop for have the complete mailing address for you including apartment number, and any other information that the postal carrier can use.
You get to do restaurant shops, write off the mileage and all legit business costs, so as to lower the taxable income. You can use what is called a "cash basis" and keep records. If you use the internet, you can write off the internet portion of your bill. Find out the square footage of your area used to make the reports out, and write it off. Do you use a computer, write off the cost.
Do good stuff, make money!! Keep all of it you ca by using the play book that the IRS makes. Yea, I know, but I will not lie to you. You may not like what is said, but you will trust me in the morning.
I totally suggest speaking with a tax accountant. It cost me $250 to have last year's taxes prepared but that amount is now deductible on this year's taxes. It is the first time I have ever paid someone to do my taxes in 25 years but I feel it was totally worth it.
As for the cell phone question he told me that the IRS no longer requires you to indicate how much was business use and allow you to claim the whole thing. Maybe it was just my state (doubt it) but I didn't ask.
I claimed cell phone purchase, cell phone bill, home Internet, printer, and anything else I bought during the year that was business use.
Regarding taxes, I need clarification please. Can you claim mileage on schedule C? I travel a lot and was just wondering the other day if I should be keeping my gas receipts. How does filing work when you are on Social Security? I made over the 600 but not over what Social Security says I can make because I only do this part time but I definitely don't want to be in trouble with ANY part of the government.
Just use Schedule C for the MS income and expenses. It will tell you to then transfer the "net" income (or loss) to a specific line on the Fprm 1040. The amount of other income that you can have without any tax effect on your Social Security rises with your age, and there is not some terrible cliff where you would lose SS benefits totally!
Yes, you can claim either mileage or actual automobile expenses on Schedule C if you have records of your business use of the car and a record of the total miles driven for all purposes during the year.
A program like Turbo Tax will walk you through all of this by asking you questions and providing guidance as to what the questions mean. For a small business operation, I find this entirely adequate.
Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel
Poor customer service? Don't get mad; get video.
Edited 1 time(s). Last edit at 12/20/2014 03:28PM by walesmaven.
Tawana, I'm a part time shopper receiving social security. I am not a tax expert but I can offer some general comments. For correct information please consult your tax professional or the website IRS.gov.
Yes, you can claim mileage you drove to mystery shop on your Schedule C for your shopping business. You do not need gas receipts to claim mileage. You need the date you drove, the mileage you drove, where you went and what jobs you did each day in your written record. If you do not have a written record, my understanding is that you can reconstruct it from your shopping records. You also need to note your total car mileage at the start and end of the year.
The profit or loss on your Schedule C is added to any other income on your return to determine the income tax due. While your earnings from mystery shopping may not increase income tax due (if any), if you earn over $400 profit from your business you will owe self employment tax. Self employment tax is not the same as income tax.
Mary Davis Nowell. Based close to Fort Worth. Shopping Interstate 20 east and west, Interstate 35 north and south.