Flash is absolutely correct about the first landline into your home not being deductible as a business expense. That has been the case for eons!

One thing to consider is that all companies will list you as an expense whether they send you 1099 on not. And if they are audited then it might catch up with you.
Best to just claim it all. And as pointed out, makes it easier to claim all expenses you can and justify them.

As a person who earned a living preparing taxes, my advice has always been, keep every receipt and please oh baby please keep track of your mileage.

I had clients that were clueless All they heard was no taxes and said sign me up. This hurt my clients severely who counted on EIC at the end of the year. Finally, out of my own pocket I gave these clients a box of envelopes so hopefully they would save receipts. It made more work for me next tax season but I was able to save them money.

My meals on the road may or may not fly. I keep my receipts because if they do fly it is another deduction. If they don't, I spent all of $2 on a box of envelopes. It's not that big of a deal to keep the receipts and set up a work sheet in Excel, just in case the deduction flies. Truck drivers are allowed meal allowances so that's the information my previous comment was based on.

I'm very conservative with my deductions. I moved from one state to another and fought the previous state on taxes owed for 5 years. This also happened with all of members of my family. We finally won, but it was a royal pain.

I use a coupon booklet/binder for all of my receipts. I clean it out every month and staple all like receipts together. The receipts are loaded into a spreadsheet, that is printed out and then everything goes into an envelope. I don't do this just for tax purposes. I travel long day routes, over 400 miles a day is not unusual. This system also helps me determine my most profitable routes.

I will say it again. Contact a tax professional if you have questions. Right now they are being informed of changes that may happen. They should have the most up to date information.

In the meantime, save every receipt and set up spreadsheets.

@MA Smith wrote:

I will say it again. Contact a tax professional if you have questions. Right now they are being informed of changes that may happen. They should have the most up to date information.

In the meantime, save every receipt and set up spreadsheets.

I totally agree. And, in my opinion, which I know isn't shared by some others, unless you are, or have been, a professional in the tax business (CPA, tax attorney, licensed/certified tax preparer), anyone who is self employed should have their taxes done by a professional. There are some shoppers on here, like MA, who are or were tax pros. If they keep up with current regulations, or, more important, know where to look for answers, why not do their own taxes?

But, the rest of us? I can't see it. I've been self-employed for 27 years, and have worked with four CPAs and one certified financial advisor/tax professional. Except for one CPA who was incompetent, I had/have complete respect for them and trust in their advice. Most of them specialized in working with small businesses and sole proprietorships. I've been with my current guy for about 15 years, and I know that he stays current on the laws. Even so, nobody can be aware of every change and every nuance in the tax laws. So, I'm glad that my guy, if he doesn't know something, isn't afraid to say, "I'm not sure, but I'll find out and get back to you." And he does. I'd be worried if I had someone who "has all the answers." I doubt that's possible. The tax laws are complex as it is for regular folks, and more so for the self-employed. Things like meal deductions and other travel expenses are not black and white, as MA alludes to. But many people here seem to think they know more about it than tax pros do.

I'd never presume that I could do my own taxes as well as a pro could. Nor would I ever want to try. In 27 years, I've never been audited; I sure wouldn't want to do my own taxes and possibly leave myself open to one because I didn't know what the hell I was doing. Of course, having them done by a pro doesn't prevent an audit, but I'd have someone who does know what the hell he's doing backing me. (And, again, as MA says, I'd have my receipts--LOL.)



Edited 1 time(s). Last edit at 07/09/2016 10:10PM by BirdyC.

I certainly agree with that. I used to do my competently before "shopping." After I started, I decided to use Turbotax and then the same online. Glad I did. I still use it mostly for convenience (at home-it is more convenient for me).
The program found deductions I did not know about, and disqualified those I thought I knew.

In any case - use a professional You will undoubtedly save money even with the cost of service.

Not to unnecessarily muddy the waters on tax deductions, but this may be helpful and may be applicable to some route shoppers. Once again, you don't need to be on an overnight trip to be able to deduct some travel expenses. In keeping with that, I believe that (based on reading of various tax publications written by tax experts), in some cases, you can stop at a hotel/motel to get a few hours sleep and deduct the cost. You don't have to spend the entire night, and it can even be during the middle of the day!

Having said that, I don't know what sort of trips, how long (hours wise or mile wise), etc., a trip would have to be in order for this to be an allowable deduction. One would have to ask one's tax advisor. But I'm thinking that if a shopper is doing an exceptionally long route and is falling asleep at the wheel (even figuratively if not literally) and needs two or three hours of sleep in order to safely make it home, that could be a case where he or she can rent a room and deduct the cost.

Also, if you're on vacation and conduct business during that vacation, if you spend a majority of one day conducting that business, you can deduct some travel expenses for that one day. (Source: In-person information from tax advisor from DeLoitte Touche.) Again, check with a tax expert, but this is something that also might come in handy for shoppers who pick up shops during a vacation, Especially if you, for example, build a route to shop on your way to your destination or on the way home.

Might as well get all the deductions you're entitled to, as long as you're reporting all the income you have to!



Edited 1 time(s). Last edit at 07/10/2016 02:28AM by BirdyC.

If I'm struggling to drive because of being sleepy, I am going to just spend the night rather than pay for a hotel only to use it to sleep for a few hours. There are motels that rent by the hour. I wouldn't even want to slow down when driving by them, so no way in hell would I consider sleeping there for a few hours

@BirdyC wrote:

@MA Smith wrote:

I will say it again. Contact a tax professional if you have questions. Right now they are being informed of changes that may happen. They should have the most up to date information.

In the meantime, save every receipt and set up spreadsheets.

I totally agree. And, in my opinion, which I know isn't shared by some others, unless you are, or have been, a professional in the tax business (CPA, tax attorney, licensed/certified tax preparer), anyone who is self employed should have their taxes done by a professional. There are some shoppers on here, like MA, who are or were tax pros. If they keep up with current regulations, or, more important, know where to look for answers, why not do their own taxes?

But, the rest of us? I can't see it. I've been self-employed for 27 years, and have worked with four CPAs and one certified financial advisor/tax professional. Except for one CPA who was incompetent, I had/have complete respect for them and trust in their advice. Most of them specialized in working with small businesses and sole proprietorships. I've been with my current guy for about 15 years, and I know that he stays current on the laws. Even so, nobody can be aware of every change and every nuance in the tax laws. So, I'm glad that my guy, if he doesn't know something, isn't afraid to say, "I'm not sure, but I'll find out and get back to you." And he does. I'd be worried if I had someone who "has all the answers." I doubt that's possible. The tax laws are complex as it is for regular folks, and more so for the self-employed. Things like meal deductions and other travel expenses are not black and white, as MA alludes to. But many people here seem to think they know more about it than tax pros do.

I'd never presume that I could do my own taxes as well as a pro could. Nor would I ever want to try. In 27 years, I've never been audited; I sure wouldn't want to do my own taxes and possibly leave myself open to one because I didn't know what the hell I was doing. Of course, having them done by a pro doesn't prevent an audit, but I'd have someone who does know what the hell he's doing backing me. (And, again, as MA says, I'd have my receipts--LOL.)

Isn't it sad. In many states, District of Columbia and Puerto Rico the jurisdictions collect money for their treasuries without all this nonsense, bullying by the IRS, penalizing taxpayers for committing errors on forms that the ordinary person can not comprehend.

The jurisdictions do not ask the taxpayer for any information therefore hackers can not steal your identity. Even a criminal can be taxed without giving up their 5th amendment rights regarding self incrimination. It burns my butt to know criminals are exempt from paying Federal income taxes on money acquired from criminal activity because of the 5th amendment. Even illegal aliens and tourists pay taxes for the services they use,

The taxpayer knows exactly what they owe when they make a purchase.The wealthy does not have 10,000 amendments/exemptions to the tax code that are not applicable to middle class taxpayers. They pay like regular people.

The taxpayer needs no special education. The merchant includes the exact tax you owe and will not complete the sale unless you agree to pay the tax. You can not over pay or under pay. You can not be penalized for failing to pay. The process is so simple a child can and does pay taxes. .I will stop right here before I get political.

Edited 1 time(s). Last edit at 07/10/2016 06:08AM by Piled Hip Deep, PHD.

@LisaSTL wrote:

I wouldn't even want to slow down when driving by them, so no way in hell would I consider sleeping there for a few hours

Well, of course, that's an entirely different matter!

But, you wouldn't have to stay at an by-the-hour fleabag motel; you could rent and pay for a room at a nice place, and just stay a few hours. (Even if you're by yourself--LOL.)

Easier and cheaper...
I keep a small pillow in the car. If I am sleepy, I pull over someplace safe, recline the seat and snooze for an hour before moving on.

@walesmaven wrote:

Easier and cheaper...
I keep a small pillow in the car. If I am sleepy, I pull over someplace safe, recline the seat and snooze for an hour before moving on.

Definitely easier and cheaper for an hour or so! But I'd hate to try to sleep in my car for three or four hours. Gets awfully sweaty in there if it's hot out--I'd hate to keep myself company the rest of the way home after that...

I've never, for any of my businesses, been on a non-overnight trip that necessitated a rest of several hours, but it sure would be nice to be able to crash on clean sheets in a nice room and be able to deduct the cost!

Birdy, I called my CPA because I know as a former tax professional I definitely took meals off for clients that weren't in sales, discussing business or anything else. They were driving a minimum of 300 miles a day and definitely not in their hometown. My ex-husband was an OTR driver and the first thing that happened when he got home was hand over his log and meal receipts. After he handed over everything; he got a kiss and a hug. Took me 3 months to train him of how it was over the top important for his receipts. Many tears were shed and they weren't mine.

The best way to worry about meals is set up a spreadsheet; include the mileage, location and purpose. Then let a professional determine if it flies.

I'm not seeing the problem. We have to keep receipts. It's easier to keep track of our income with spreadsheets. Honestly, one more spread sheet is really that difficult?

@MA Smith wrote:

The best way to worry about meals is set up a spreadsheet; include the mileage, location and purpose. Then let a professional determine if it flies.

What I give my tax preparer: four spreadsheets -- one for personal (W-2) income, one with personal expenses (mortgage interest, charitable deductions, etc.), one with all of my Schedule C income, and one with all of my business expenses. My travel expenses are broken down into lodging and meals. I count all meals that I have receipts for and let him figure out what to deduct.

I don't find this difficult. What I find surprising is that so many people here have insisted that meals aren't deductible for day trips. There's nothing in the applicable IRS sections that says that, and nothing that states that meals are only deductible for overnight trips. I'm mystified over this, myself.

When I used to go on all-day, out-of-town press proofs, on the rare occasions when the sales rep wasn't around to take me out to lunch, or when the day ran so long that I had to stop for dinner on my way home, those meals were legitimately deductible. There's no way I was gonna eat in my car--in my business suit, or ask to use the employee lunch room so that I could brown-bag it for lunch. And I can't imagine why anyone would think that those meals weren't legitimately deductible!

This is SOP in most self-employment professions with which I'm familiar. But maybe not in mystery shopping? I haven't been doing it long enough to know if it's considered customary, but I can't see why it would be different than other professions.

None of my tax professionals has ever asked me to note the mileage I drove on my business trips next to my meal expenses -- but if they do, I will! I, of course, have a record of the mileage I drive each business day, so if asked, I have the figures....



Edited 3 time(s). Last edit at 07/13/2016 12:37AM by BirdyC.

Just to add one more thing.... It's not just mileage that counts for purposes of deducting meals. I've been on 180-mile round-trip press proofs that took all day--leave the house at 6 or 7 a.m. and not get home until 6 or 7 p.m.. Qualifies to take meal deductions!