So depressing... I paid $3.56/gallon on a Shop yesterday.

even the el-cheapo gas is hovering around $3.20/gallon around my neck of the woods. Better pick up some more gas station shops!

Several gas station shops are defraying my current travel costs. Other super-simple shops are increasing my profit margin for the little jaunt.

These little jobs are conveniently situated near decent pit stop areas; this is important in the middle of nowhere.

All is well.

I saw the $3.20 and wondered if maybe I was losing it and that it had been $3.33 this morning, but no, we are down to $2.33. I suspect with lower state and local taxes in some places they must be right around $2 by now.

I know when I head for Mesa tomorrow that I'll drive 100 miles at least. By the time I get home I will have done four shipping shops, a casual dining shop, a retail shop, a check cashing shop and picked up two pizzas on the way home. I'll gross $113 and spend about $20 in gas. I'll drive about three hours total. So my net (not including wear and tear on my car and my body) is $93. A pretty good day for me. I am still waiting to see if I get a video shop for tomorrow. Then I am up to $153 and that would be a great day. I just try to aim for specific parts of the Valley of the Sun and take whatever I can handle physically. My hair stylist is in Scottsdale so when I shop in Scottsdale I get my hair cut. There is an outlet mall I like to really shop at in Anthem so when I work in Anthem I leave time for that. I shop casinos in the southeast part of the valley and get free hotel rooms as comps. I then use the hotel rooms as home base while I shop in that part of the valley. It saves me a lot on gasoline if I don't have to drive all the way home. Strategic planning has become vital to making any money at this. If I don't make a profit I will quit. Some of my profit comes with free oil changes, car washes, and food. But cash is King!

Meanwhile, to answer the OP, if those $15 fees are one right after the other as I drive, I can really clean up in a day. I"ll keep driving as long as they aren't too far apart. If they are, I'll wait and do 1-3 bonused ones. I did that awhile back, and the $15 turned into $65 for towns in my immediate radius. So I made $195 for one day.

Ring, ring, Hello. You have reached the Sensitivity Police. We advise you to grow a pair. Thank you and have a nice day.

I love the way you have calculated this. I think that we, as professional shoppers, need to develop an algorithm calculator in order to quickly and efficiently determine if shops are costing us money or making us money. First, we need a clear mathematical formula and then I am sure we can figure out a way to create the function. Perhaps we can use a simple excel function. You would need to include cost of materials though. It does cost ink to print. check out this link on print cost per page.[www.ganson.com] on inkjets its about .25 - 1.00 per page. Laser its about .15 per page. Then you would also have to factor in time for business management such as mileage records, irs records, verifying payments, etc.

@myst4au wrote:

Take the simplest case of this being an isolated shop (not part of the route) which pays $15 (no purchase required). If I have to drive 5 miles each way, the IRS says that the mileage is 10 x $0.575 = $5.75. That means that everything else has to be worthwhile doing for $9.25. Lets assume that it takes you 10 minutes each way , and you value your time at $10 per hour ($0.16 per minute), then 1/3 hour x $10 per hour = $3.33 and now you are left with $5.92 to pay for your time in the store, preparing for the shop,and reporting it. So, $5.92 / $0.16 per minute = 35 minutes. If your time in the store, preparing for the shop,and reporting it combined take 35 minutes or less, then you are making your required $10 per hour. If your goal is to make $20 per hour, then I can tell you already that with the timing assumptions above, you would not be making your goal. I hope that helps.

Edited 2 time(s). Last edit at 08/15/2015 08:52PM by martica.

OK, come one guys, lets play with this for a bit. I'm really liking the thought of having a formula where I could input this data to figure out which shops are worth it. It may seem like just inputting the data would take too long but in reality you only have to enter the data once to figure out what type of shops you should not do if you are doing mystershopping for profit.

Either way it does put things in perspective in terms of "are you making money or spending money" with mystery shopping.

This is what I've come up with so far:
Mileage (wear & tear) = miles x .575
Time Investment/Value = $10 per hour (might be a bit low)
Shop time + Travel time + Business Management (IRS, Mileage records, Filing, etc)
Shop prep time (study shop), Shop post time (quick debrief in car), Report input + document upload/edit
Payment verification/record keeping

Print material = .25 per page
Taxes = THIS IS THE MOST IMPORTANT PART, IT TAKES A WHOPPING AMOUNT OFF YOUR EARNINGS!
Depending on your income it could be anywhere between 10% to 25% --- or up to 39% for people earning big bucks. So that means that if you took a shop for $10 you automatically owe between $1 to $2.50 making that shop only worth $9 or $7.50 AND that's without all the other expenses.

***If you are not careful, you will end up working not for free but actually paying to work.***

The percentage you take out of your fee for taxes should be depending on what you will earn so you will have to project that amount. Here is a tax bracket list I found online that might help. I am not a tax expert and nothing I say should be taken as professional advise ---disclaimer.
[www.bankrate.com]


Here is a nice article on organizing yourself for independent contract work. [workathomemoms.about.com]


Error factor - you have to factor in a little bit of a loss to cover for human error every now and then, that would depend on your experience and skills. But it has to be factored in right? So I suppose you would calculate your percentage rate of success and then use the failure percentage as a guide for loss liability?

The point made by Martica, "***If you are not careful, you will end up working not for free but actually paying to work.*** " is very interesting. I had never thought of it in that way. I want to add that the higher your tax bracket, the more important business deductions and reimbursements become since you don't pay taxes on them.

Of course, if you have a traditional job, you also pay taxes, but being an independent contractor does add the aspect that you really could be loosing money after taxes. This is yet another factor that the people who continue to say that they are happy to drive 100 miles each way as long as they get enough bonus money to pay for their gas need to be considering.

I don't see how anyone could do this seriously and end up working for free or actually losing money. I am not otherwise employed but I do have other money coming in. I mention this other income to make it clear there is other income to be considered in my case.

The mystery shopping/auditing I do adds to my taxable income only in an insignificant amount because I take deductions to which I am legally entitled, which gets my net down to very little. If I took all my deductions I could get my net down to a negative number but I don't think that's a smart move. Every year I pay some self employment taxes on a little mystery shopping income.

To those who are getting kicked to a higher bracket because of mystery shopping or who are even paying additional taxes within the same bracket because of mystery shopping, I believe you are not taking the full benefit of the tax advantages available to you. If you are depending on a tax professional who is preparing a return showing significant profits on your mystery shopping business it would be a very good move to consider changing to a more knowledgeable and a more dedicated (to you) tax professional.

The best option, even if you use a tax professional, is to understand your tax situation yourself. Complacency and ignorance about your tax situation will not work to your advantage. Everything you need to know is available on the IRS.gov.



Edited 1 time(s). Last edit at 08/16/2015 02:29PM by MDavisnowell.

@Irequim wrote:

I do not value my time as I look at as I got nothing better to do.

I realize this doesn't apply to many shoppers, but this mentality is a large part of why companies can get away with underpaying and mistreating workers. Everything you do comes with an opportunity cost. It's not just lawyers and CEOs who should value their time. If nothing else, as was suggested above, you can donate that time to a charity instead of to a for-profit corporation that's being handed gifts it doesn't deserve.

I certainly agree with MDavisnowell that after legitimate deductions you can manipulate your business to have little tax impact while providing a whole lot of value. And I'm not talking about cheating on taxes but rather using what you are legally allowed as well as using smart choices in what shops you select.

Example - $6 fee $10 reimbursement at a grocery store 5 miles from my house
10 miles (round trip) x .575 = $5.75 IRS deduction
1 hr (if I include getting dressed, driving there, doing the shop, driving home, putting away groceries, changing clothes, doing the report, updating my spreadsheet)

This has a whopping big 25 cents as 'taxable profit' once the mileage is deducted. I certainly don't print shop instructions, though I do use the scanner on my computer to prepare the receipt for submission.

If I don't count the value of the reimbursement then I worked for 1 hr for 25 cents.

If I do count the value of the reimbursement, then I worked for 1 hr for $10.25

If I realize that the actual cost of running my vehicle is about 13 cents per mile (including depreciation, insurance, tags, gas and amortized repairs over time) my mileage cost is only 1.30 even though IRS will give me a a much larger deduction to offset the taxable fee, so for my 1 hr I actually have $14.70 of untaxed benefit.

This is a 'cake' you can slice many, many ways depending on whether you are feeling abused or not. When the reimbursement is of value to me, it is definitely a benefit of the shop.

Any reimbursement for something you would buy/have bought anyway is worth more to you than spending the same money out of your own pocket because the money in your pocket is money on which you already have paid taxes.

With a little planning towards the end of the year you can adjust what your taxable year income from shopping will look like by making purchases for your business or driving to more distant shops. Obviously your actual cost of running your vehicle will vary depending on its age, initial cost to you, cost of your insurance and cost of repairs over time. That 'base' on one vehicle in the house is about 9 cents per mile (excluding gas) based on last year's mileage, on the other vehicle it is now down to about 4 cents per mile, but with today's gas prices the gas cost is about 14.5 cents per mile because it is a gas hog.

I never want my business to have $0 taxable income or less, but it doesn't need to be high enough to require self employment taxes or impact my tax bracket.

Edited 1 time(s). Last edit at 08/16/2015 03:42PM by Flash.

As an example, a friend makes handmade jewelry and sells it. She will spend hours making a piece and sell it for a dollar. Her reasoning is she would rather have $1 than $0, as if those were the only two options available to her.

She's been an hourly unskilled worker all her life, so it's not surprising that she values her time this way and doesn't understand explanations to the contrary.

It depends upon the shop and the scheduler. Can I add another shop (or several) to it? Is it easy? (I drove 25 miles each way for a thrift shop that took me only a few minutes with easy reporting.) Do I owe the scheduler? And/or, is s/he going to remember that I filled this shop and boost me to another, better shop? (Hint: most do NOT, even if they pretend they will.) Too many variables for a simple yes or no.

@af517 wrote:

@Irequim wrote:

I do not value my time as I look at as I got nothing better to do.

I realize this doesn't apply to many shoppers, but this mentality is a large part of why companies can get away with underpaying and mistreating workers. Everything you do comes with an opportunity cost. It's not just lawyers and CEOs who should value their time. If nothing else, as was suggested above, you can donate that time to a charity instead of to a for-profit corporation that's being handed gifts it doesn't deserve.

Not only this but you're taking away work from someone who might actually need the income.

@martica wrote:

Taxes = THIS IS THE MOST IMPORTANT PART, IT TAKES A WHOPPING AMOUNT OFF YOUR EARNINGS!
Depending on your income it could be anywhere between 10% to 25% --- or up to 39% for people earning big bucks.

As a self employed person you have to give them 15% right off the top for FICA not including income tax itself.

That 15% self employment tax is figured on the net profit, not on the gross. Not sure exactly what you meant by right off the top.

Yes. It's off the top of profit, but before the standard deduction and personal exemptions you get for your actual income tax.



Edited 1 time(s). Last edit at 08/16/2015 11:07PM by bgriffin.

@bgriffin wrote:

Not only this but you're taking away work from someone who might actually need the income.

There are wealthy people who refuse to let their minor children work minimum wage jobs because they don't want to take away a job from someone who needs it. The thinking used to be that kids who worked for minimum wage would learn humility and hard work and not grow up spoiled and entitled, but I think this option probably does less harm overall.

Edited 1 time(s). Last edit at 08/17/2015 01:32PM by af517.

@bgriffin wrote:

Yes. It's off the top of profit, but before the standard deduction and personal exemptions you get for your actual income tax.

Huh??? The topic along here had been self-employment tax. If you earn more than $400 from self-employment you will have to deal with it and that is $400 NET profit. And yes the self-employment tax rate is about 15%, but it is not subject to any personal exemptions or standard deductions. Most shoppers will not reach a $400 NET PROFIT if they are properly taking the expenses for their business on their Schedule C.

Schedule C net income funnels into the first page of your tax return along with other income such as wages, interest, dividends and capital gains. Once it lands on the front page of your tax return it is treated exactly like any other income vis-à-vis taxation.

Edited 1 time(s). Last edit at 08/17/2015 04:13PM by Flash.

Um. You just said exactly what I did. What's the "Huh???" for??????