This year most of the shops I have completed were reimbursement shops (restaurants etc). I did not make much (total is under $4). I worry if my ratio of income ($ paid for performing shops and $ for food reimbursement) vs expenses ($ spent on food and mileage) is appropriate. Right now they are almost equal... after deducting business expenses from business income I get only $200 of the taxable income. I technically could even claim office expenses since I have a separate room with desk where I only do the reports, but I am afraid to raise a red flag for IRS.
Is it appropriate to have your expenses matching your income, so that it looks like you made only so little without raising a possibility of the audit? I utilize all the available deductions according to the law and I really like my food shops. After all, they are business expense. I would appreciate your advice in this manner.
You situation is entirely normal far many, many shoppers and other small business people. I would not take the office deduction for a year in which my net on Schedule C is low (but positive). It is not a trigger for IRS audit for very small business operation, so don't worry about taking it in other years when your net on Schedule C is higher. It is worth while to show a net profit, even a small one, so that the IRS will not treat your income as "hobby" income, which would disallow all of you expenses.
Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel