$ 600 in one Year
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Per the IRS, you are responsible for taxes on all earned income. The IRS is notified of earned income when the 1099 is filed by a company (when you reach $600 in earnings.). One of the multi-listing job boards has taken it upon themselves to track your earnings - when you accept a job through their board. When I saw that, I logged off and never went on it again.
If a company pays you $600 or more in a year they will send you a 1099. But it doesn't matter a hill of beans because you need to be claiming every buck earned as a self-employed person anyway. So if your fees from A are $5 and from B are $801 and from C are $599 your gross income of your business is NOT $801 but rather $1405.
KR- May I ask which multi-listing job board that is?
Please clarify your comments. There are too many terms being used across the board. By fees, do you actually mean payment? We are paid reimbursements and fees. I think in a nutshell, all funds we received is income, correct? Of course, from there we report expenses to determine net income.
My posts are solely based on my opinions and for my entertainment, contact a professional if you need real advice.
When you get in debt you become a slave. - Andrew Jackson
When you get in debt you become a slave. - Andrew Jackson
Isaiah58
Yes. Just say I spend $ 4.65 at McDonalds and the report is $ 7.00 I will make $ 11.65
If I did that 12 times in one year that will be $ 139.80
If I did a Poppa John Shop 12 times in one year and I make a total of $ 588.35 (after expenses and shop fees and bonus)
That is a total of $ 600.00
That is what I am asking
Yes. Just say I spend $ 4.65 at McDonalds and the report is $ 7.00 I will make $ 11.65
If I did that 12 times in one year that will be $ 139.80
If I did a Poppa John Shop 12 times in one year and I make a total of $ 588.35 (after expenses and shop fees and bonus)
That is a total of $ 600.00
That is what I am asking
Fees are taxable, reimbursements are not. It is permissible to list as income on your Schedule C just your fees if you do not subsequently subtract out your reimbursements. It is also permissible to list as income on your Schedule C every penny you receive and subtract out the reimbursements. The taxable total should come out to the same either way. My personal preference is to list every penny and take out reimbursements later in the form. Either way there will be other deductible expenses, such as mileage at the applicable rate IRS allows for the year, office supplies, equipment and such.
As has been stated many, many, many times on this forum, your 1099 will not match your earnings unless in 2015 you were paid for no 2014 shops and all 2015 work was paid for before 12/31/2015. Even then, some companies do strange things 'the accountant' told them to do, such as including Paypal fees the company had to pay as income to the shopper, or to include reimbursements on the 1099 as if they were income, or charging jobs to the wrong shopper. You won't be filing a copy of the 1099 with your tax return so unless the 1099 numbers are truly out of whack ($40,000 instead of $4000) you will be basically ignoring them whether you are a cash or an accrual taxpayer.
As has been stated many, many, many times on this forum, your 1099 will not match your earnings unless in 2015 you were paid for no 2014 shops and all 2015 work was paid for before 12/31/2015. Even then, some companies do strange things 'the accountant' told them to do, such as including Paypal fees the company had to pay as income to the shopper, or to include reimbursements on the 1099 as if they were income, or charging jobs to the wrong shopper. You won't be filing a copy of the 1099 with your tax return so unless the 1099 numbers are truly out of whack ($40,000 instead of $4000) you will be basically ignoring them whether you are a cash or an accrual taxpayer.
@Isaiah4031a wrote:
Isaiah58
Yes. Just say I spend $ 4.65 at McDonalds and the report is $ 7.00 I will make $ 11.65
If I did that 12 times in one year that will be $ 139.80
If I did a Poppa John Shop 12 times in one year and I make a total of $ 588.35 (after expenses and shop fees and bonus)
That is a total of $ 600.00
That is what I am asking
They SHOULD NOT include the reimbursements when deciding if, when and how much to send you a 1099 for, but this does not mean that they WON'T. If you get a 1099 if it is roughly in the ballpark of what your records show, don't worry about it. If you get a 1099 that is totally out of line, get it straightened out. If you get the standard baloney that 'that is what our accountant told us to do', make a note of who you spoke with and when and work your tax return around them so that you have record of reasonable inquiry if/when IRS has questions. I know of very few instances where MSCs have been willing to correct a 1099 and that has been the obvious orders of magnitude off ($40,000 when you earned $4000).
To answer your question, each MSC sends a separate form based only on the money you got from them. They don't know how much you made from other companies. Some MScs may send you a form even if you don't get $600. Others will send you a form when you reach $600 in fees. Others will send you a form when you make a total of $600 in fees and reimbursements combined. Companies that pay through PayPal may not send any 1099s at all.
If you make over $400 actual income from ALL work, you are supposed to report. The 600 is only the threshold where MSCs are required to send forms. I ma guessing IRS is going on the assumption that you will have 200 deducted in work expenses...so its really like making less than 400.
as the MSCs are not connected....each one would have no way of knowing how much you made with the others. they only report what you make with them individually..
and you don't count reimbursements as income
ALSO, i think there are 2 ways of reporting income...either based on the month you get paid...or the month you actually do the work
as the MSCs are not connected....each one would have no way of knowing how much you made with the others. they only report what you make with them individually..
and you don't count reimbursements as income
ALSO, i think there are 2 ways of reporting income...either based on the month you get paid...or the month you actually do the work
My tax preparer, also a mystery shopper, figures my shopping income based on when I'm paid. It makes things easier for me to track as, in the extremely rare event that I'm not paid for a shop, I don't have to go back to find the money I wasn't paid.
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Thou shalt not steal. I mean defensively. On offense, indeed thou shall steal and thou must.--Branch Rickey
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I report all of my income and use the standard deduction for auto/fuel expenses. I live in a rural area and rack up a great deal of miles per year. It evens out since I can justify the mileage and I usually only pay the SSI self employment tax. This may be different if you live in a larger city and don't travel much for work.
The income is based on when you were paid, not future income such as work in December 2015 that gets paid in January. That income would be considered 2016 income.
The income is based on when you were paid, not future income such as work in December 2015 that gets paid in January. That income would be considered 2016 income.
Actually, the taxpayer can elect either to compute income and expenses when incurred/earned or when paid/received. Either reporting methods is legal. There is a place on the tax form to tell the IRS which you have used. Most MSers seem to use the "cash" method: income when it is received, not when it is earned. So, a shop completed in December but paid in January 2016, would be 2016 income in this case. BUT the mileage to that December shop would be a 2015 expense under the cash reporting method. (Yes, even if it was put on a credit card in December that was paid in January.)
Note: I am not a tax professional. I have been doing personal and small business taxes for myself since 1965. For several of those years I had everything checked out by my tax accountant. I was audited once and the auditor apologized because whoever called for the audit was, in the words of the actual auditor, obviously "confused." For all but three of those years I have been self-employed, either as a sole proprietor and/or as the owner of a small business corporation. I monitor IRS guidance closely.
Note: I am not a tax professional. I have been doing personal and small business taxes for myself since 1965. For several of those years I had everything checked out by my tax accountant. I was audited once and the auditor apologized because whoever called for the audit was, in the words of the actual auditor, obviously "confused." For all but three of those years I have been self-employed, either as a sole proprietor and/or as the owner of a small business corporation. I monitor IRS guidance closely.
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.
Shopping from the Carolinas to New York
Have video cam; will travel
Poor customer service? Don't get mad; get video.
I report every single dollar I earn from every single MSC to the penny. Even if you ordered a Hedgehog lunch and it came to $5.82, you report it. 
It really becomes a matter of personal preference whether you just report fees and bonuses or claim everything and deduct expenses. My personal preference is to claim every cent. Similarly it is a matter of personal preference whether you report the payments you receive in the calendar year as income (cash basis) or what you earned in the year regardless of when you receive it (accrual basis). My personal preference is accrual because I can more easily control what my bottom line will be with year end business purchases as needed. And indeed as someone pointed out, it is only the income that can shift whether you are cash basis or accrual basis, your expenses are claimed for the year when you lay out the money or drive the miles.
As an IC you are self employed. We are required to report all income. Income is reported and business expenses are deducted including out of pocket purchases, mileage, applicable expenses such as office supplies and sometimes portions of other acceptable expenses.
You might wish to set up an excel spreadsheet or just make a manual log of all shops you do. Record the total income and break out the fees earned and reimbursement and include a column for recording mileage. I find it is also a good way to follow up and track payment when it is received.
You might wish to set up an excel spreadsheet or just make a manual log of all shops you do. Record the total income and break out the fees earned and reimbursement and include a column for recording mileage. I find it is also a good way to follow up and track payment when it is received.
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