This is the first year I'll have to report income for mystery shopping. What tax software do you use? The only write off I'll have is for mileage. I don't have a cell phone, my computer and printer are over 5 years old. Except for mileage, I cannot think of anything else to write off.
Seriously, you do have more expenses than just mileage! Do you ever print out shop instructions or questionnaires? You can deduct some of the cost of ink and paper (proportionally to business use vs. personal use). Plus other office supplies you have to purchase in order to conduct your business.
You must use e-mail and the internet a great deal for communication with MSCs, checking job boards, accepting assignments, etc. You can deduct part of the monthly cost of internet/e-mail service (again, proportionally). Do you do any purchase shops? You should account for those by counting your total fee as gross income (assuming you receive your combined fee in a lump sum from the MSC), then deducting the costs of the purchases. (I think if reimbursements are paid separately, that might open up other issues if you get "fancy" with your bookkeeping. But I think, in simple cash-basis accounting, you can still roll the reimbursement into gross receipts, then deduct the cost of the purchase.)
If you don't have a cell phone, do you make a lot of land-line calls for mystery shopping, especially long-distance ones? Some of that can be written off. Are you ever out on all-day routes and stop to have lunch? You can deduct the cost of your meals.
If you really think about it, you incur many more expenses directly related to, and required by, mystery shopping. Some may not be worth the time spent in tracking them, but every little bit can add up to a nice fat, legitimate expense against income.
I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.
Edited 1 time(s). Last edit at 11/10/2015 01:19PM by BirdyC.
Whatever you do, don't use the cheap ones like TaxCut. I have used Turbotax in the past - and it walks you right through all those deductions and such. Then I did tax mystery shops so had them done for several years --- until last year when the MSC said you couldn't do business taxes (I'm still wondering how they got shoppers who don't have business deductions). My mystery shopping is rolled into a general business where I incorporate the MSing into another business, so no-one doing my taxes would know it was mystery shopping.. but I digress. As I was saying to answer the question. So last year I decided to go for one of those cheaper ones. Sure they do the job - but what they DON'T do is walk you through it step by step. It's sort of like here is the form, fill it in. I'm still not confident they were done correctly.... Soooooo - Lesson learned - you get what you pay for and I'll be back to Turbo Tax this year and not wander away again (unless I can get a tax completion mystery shop again .
I use TurboTax and have for close to 2 decades. I believe that Goodkitty was referring to mystery shops of tax preparation services. The MSC could certainly tell the mystery shopper not to include a business tax return. Frankly, I could never understand how a mystery shopper could get a return done which included mystery shopping income and not be outed as a shopper. That is beside the point that I personally would not have my taxes done by that large national chain anyway. The year it gets beyond me using TurboTax, I will find a CPA who is also a Registered Agent.
Shopping Southeast Pennsylvania, Delaware above the canal, and southwestern NJ since 2008
I use www.freetaxusa.com. Costs me like $8 to file for State. I get a PDF to download of all my documents for auditing purposes as well. There are shops available for taxes but unless it pays beyond the fees to get it done, I'd rather pay $8 and be done in about 30 minutes. It would probably take me longer if I did the deductible expenses but my standard deductible is always higher so I stopped worrying about it. If I ever have significantly more expenses, I'll try it again. I'm looking forward to taxes taking closer to an hour and half since I did work for so many MSC this year. Might fly quicker in 2017 though.
Hey Johnb -what I meant to say is for their tax shops they screen you. And if you plan on doing a business deductions or expenses (such as mystery shopping) then you can't do the tax shop (You get screen out). So my question to them is - who are they getting to do the shops for them if a mystery shopper can't do it because they treat mystery shopping as a business.
We used TurboTax for about 20 years -- until they started charging extra for the Schedule C. Did last year's through TaxAct and was very pleased. Even though we're low risk according to TT, we have always paid for AuditDefense. Last year, they upped the price of the software AND the audit defense, both considerably higher than TaxAct's. We won't go back. We do use ItsDeductible, though. It's TT, but it's free unless you want to merge them. Headed to thrift shops in the next week to dump everything we aren't using.
Now scheduling travel shops for the day after Christmas through mid-January.