How do you report your income?

Please help me with filling out tax forms.

Create an Account or Log In

Membership is free. Simply choose your username, type in your email address, and choose a password. You immediately get full access to the forum.

More About Reports

you should talk to a tax preparer or cpa. dont trust info from public forum. too many wrong opinions.

I would highly suggest if you don't understand taxes, which it appears you don't, that you at least invest in tax software that will walk you through filing. Or a tax prepearer. BTW, nothing wrong with not understanding how to file business taxes, many people don't.

There are reasons that a body stays in motion
At the moment only demons come to mind

Business income and expenses are reported on Schedule c, where you compute how much taxable business income you have to then declare on your Form 1040 (You ordinary tax form.) It would be worthwhile, IMHO, to buy last year's version of Turbo Tax and do a "pretend" version of letting it "walk you through" the questions that it will ask when you tell it that you have income from a self-employment business where you get some form 1099s. (That's a form that tells you what MSC X paid you in fees. The list of deductible items on the Schedule C in the tax forms there will also help you understand what costs of doing business you need to keep track of during the calendar year. ALWAYS keep a written record of the beginning and ending odometer reading on your vehicle when you travel from home to a mystery shop assignment, for instance. You may learn enough from this "practice run" that you save many more times the cost of Turbo Tax when you learn from it the kinds of questions to ASK your tax preparer/ advisor. That will save you $$$$. Also, many of us just use Turbo Tax each year. YMMV

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.

And also, Mary, you MUST report ALL your income earned with MSing.....even if you do not receive a 1099 from the MSC (usually because of earning less than $600 for the year with that company). But all income needs to be included.

Q: How do I report my income?
A: Honestly and on time.

Taxes are the price we pay for a civilized society. - Oliver Wendell Holmes

I am amazed at the number of times that people think that they do not have to pay if they didn't get a form1099. They do not think that the companies that send us money are not going to let the IRS know that they sent $5.00 to Mary Ann with SSN of such and such and also to Steve for $200. You don't think they are not going to put that as a deduction to make money you have to spend money.

@Rousseau wrote:

Q: How do I report my income?
A: Honestly and on time.

This is the absolute best answer and advice you could get.

Honestly and carefully. I actually don't claim certain deductions (like my home office - I had a spare bed in there) since that was an ugly issue when I was audited years ago by a rather mean-spirited IRS individual. They find one thing and that opens the door to more years they want to look at.

@2stepps wrote:

They do not think that the companies that send us money are not going to let the IRS know that they sent $5.00 to Mary Ann with SSN of such and such and also to Steve for $200

Actually they don't. Companies can deduct payments of less than $600 to individuals without sending in a 1099. The 1099 you get is the same form they send to the IRS. So if you don't get a 1099 then the IRS doesn't.

Where the problem comes in is if you are ever audited. The IRS will lpok at your bank account and see the deposits and then you're in trouble.

Plus cheating on your taxes makes you a cheater. And a bad person.

There are reasons that a body stays in motion
At the moment only demons come to mind

Google is going to be your friend on this. First you need to look into whether or not you're going to owe quarterly taxes instead of just the annual taxes. Several factors go into that, including whether or not you're working a regular job on top of this. You also need to look into the home office deduction (which doesn't have to be a whole room) because (as I understand it) you can't deduct your mileage from your home to the first shop unless you also claim a home office, because without a home office it's just a regular commute which isn't deductible (but check with your tax professional about that). You'll have to pay the taxes that an employer usually pays as well as your normal tax rate (google self-employment tax). Depending on your normal tax bracket, putting aside 25% of your earnings should leave you with some breathing room (but again, that has several factors that affect it--you'll need to check with your tax professional). Good luck!

liz,
You do NOT have to claim a home office deduction in order to claim mileage to your shops. That is a common misconception. Time to read the IRS booklet for self-employed income.

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.

Hmmm. I actually just did the research on this in the last two weeks or so. I'll go review it again, but I thought the common misconception was that if you're self-employed you can deduct all of your mileage--when in fact the only mileage that's deductible is from one business site to the other (hence why people employed in regular jobs can't deduct their mileage from home to their job). I'll re-read it.

Just because you do not deduct a home office does not mean you can't have a home office. I never did it when I owned or rented because the amount of the deduction wasn't worth the amount of headache. Even though I had a legitimate home office that I only used for work.

There are reasons that a body stays in motion
At the moment only demons come to mind

liz, we have hashed this out about once a year, or more, for many, many years and the professionals agree that you do NOT have to take a home office deduction to take the mileage from home to the first shop, as long as you do NOT travel via the office that you use for your W-9 job.

Edited to add: I have been audited and there was NO question that they allowed all of my mileage! I do NOT claim a home office deduction. And, btw, the auditor said he didn't understand why my return was even flagged for audit, since I had fully explained and documented the "issue" when I submitted the return. That issue had nothing to do with SE or Schedule C, btw, but, of course, they had me explain every schedule. And, I had contemporaneous written documentation that about 92 percent of my mileage that year was for business purposes. If the 92 % wasn't raising any red flags, you can bet that the automated checking and the audit combined did not alarm anyone at IRS about my mileage.

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 2 time(s). Last edit at 08/27/2017 08:33PM by walesmaven.

Ok well thanks for the clarification. Is it possible you were just chosen for a random audit?

I took mine to the IRS office last year and had them look it over before I submitted it. It was about a two month wait to get the appointment, but the likelihood of getting audited when it's an IRS agent submitting it is pretty close to zero. Deducted all the mileage, every single bit of it. If you keep good records, you can use the distance listed on Mapquest if you don't have a mileage log. Be careful about the home office deduction because it affects your taxes when you sell your home. It's not really worth it unless you have a separate space like a masseuse with a studio attached.

"Let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn belongs to you - and why?” ~Walter Williams

@iShop123 wrote:

Be careful about the home office deduction because it affects your taxes when you sell your home.

That's specifically why I didn't do it. It was too much paperwork to keep up with for the $75 a year it saved me.

There are reasons that a body stays in motion
At the moment only demons come to mind

iShop, I never knew you could request the IRS go over your return before you submit it. Great idea! How much time did the agent spend with you?

I was NOT selected for a random audit.

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.

[apps.irs.gov]

Each office provides different services. My guy spent over an hour and fixed a couple of things (which actually saved me money). He would have found it if it was the other way 'round, though, so if you're showing low risk on your tax prep software, I'd probably skip it. Mine was much higher this year due to an issue non-related to MSing. I went in with a list of questions and then he walked me through things line by line.

@Wales, I agree; I think very few are actually truly "random."

Sorry, only registered users may post in this forum.

Click here to login

How do you report your income?

Create an Account or Log In

Official List of Mystery Shopping Companies

Mystery Shopper Magazine