Walesmaven wrote:" There is NOTHING about using your SSN that compromises your IC status, period."

No??????

Has anyone been told their Company is not a Company, but a Hobby?

I'm interested to hear from those people.

IRS is unlikely to question this being a business with modest to moderate net profitability as long as the 'business' make a profit 3 out of the past 5 years. The reality is that shoppers who are not being profitable don't last in the business even 3 year to lose money.

A bigger IRS concern is those who have no records and proclaim to have earned enough in their Schedule C business to qualify them for child tax credits, earned income credits and that whole pack of 'benefits' for earning little.

If you are keeping business-like records of income and expenses and producing a profit, no matter how small, there is no reason for IRS to question your business being a business. If you are doing a mixture of reimbursement only and fee plus reimbursement and fee only jobs, there is no reason for IRS to question your business being a business if you are overall making a profit. If you decide, on December 31st, to rush out and buy a computer to reduce your net profit and still have a profit for the year, there is no reason for IRS to question your business being a business. The key to differentiate between 'business' and 'hobby' is not the tax ID number the money went to but rather the profitability of the business and the quality of the record keeping. And yes, my records will show the $3 fee for surveys done from time to time for Pine Cone research and the $15 fee from a company I worked only once for during the calendar year as well as the breakdown of fee, bonus and reimbursement from those companies I receive 1099s from. The records will show when I received payments and Paypal and bank records for both direct deposits and checks deposited will appropriately back those up. And now that my bank offers check copies on the deposit receipt, my record keeping is even easier and more complete. It would be difficult for IRS to argue that my business is NOT a business that is run in a business-like manner.

As an independent contractor, you do not have to have a company. You don't even have to have a dba! You can derive income and declare it with your SS# without it being regarded as a hobby.

It's called being a "sole proprietor," and probably 99% of sole props report and file under their SSNs, not an EIN. EIN is "Employer ID"nmber. No employees, and not an incorporated business, no EIN required by IRS to establish your credentials as a business entity.

Once again, Flash is "right on the money." Pun intended.

And of course the major aspect that is always overlooked is that most of us do fill out our taxes to the best of our ability and honestly. Just as we may have differences of interpretation here as to whether a button replaced by a camera makes a garment a 'uniform' or not, so would just about any two CPAs you had the discussion with or an IRS agent if you had a discussion with them. They would all caution you on the side of NOT claiming it, but in a routine audit the agent might or might not agree with you. If there were significant other 'issues' with your return he would be more likely to disallow it. Recognize that it is in the best interests of a tax preparer who is going to defend you at audit for no extra fee to let you claim nothing that might even possibly be argued by IRS. And even IRS agents have specialties of situations they deal with, from what I understand, because overall the tax code is so complex and in some cases the courts have ruled directly against the rules generated by IRS from the tax code. The question to be asked is whether the 'uniform' question is something you would be ready to stand your ground on?

Another example. IRS says that a watch is NOT an allowable business expense. You cannot perform our business without a watch. I own personal watches but they don't have second hands or stop watch features. I understand that IRS does not want me buying a Rolex and charging it to my business as an expense. But I WILL deduct the $10 Walmart watch I buy about every other year with its rubber band, clear digital display and stop watch. Should I ever get audited I will wear my personal watch and throw the cheap digital in my purse for 'show and tell'. As far as I am concerned, it is 'office supplies' just as much as my clipboard and note pads are.

CPAs generally have a good overall knowledge of tax law and tax codes, but specific situations may be out of their area of expertise. When I was still in the stock brokerage/financial planning business we used to encourage our clients to bring in their CPA prepared returns before final filing. We found a discouraging number did not know how to handle wash sales or long versus short term capital gains/losses. And forget about them knowing how to calculate or handle accurately the taxable and non taxable portions of annuity payments where the annuity was purchased with after tax dollars. These days I gather the annuity companies are sending out that information, but it hasn't always been that way. IRA custodial fees when paid from post tax funds rather than by the IRA itself was also a mystery to many CPAs. It got to the point that we were sending all of our clients to their choice of 3 CPAs in town who 'got it'. And I suspect those CPAs would not do a decent job with a mystery shopping business.

My own return always has so many odd things about it that it makes sense to prepare it myself. It has investments, it has my farm, it has my mystery shopping and a few other off-the-wall things most every year. It would cost me a bloody fortune to have it professionally prepared, which is why I so love TurboTax and the surprisingly well indexed IRS.gov website.

BTW,
The actual modification of shirt or blouse to accomdate a hidden camera is somewhat more complicated than just removing a button. It is my understanding that law enforement folks, who go undercover and wear similar equipment are routinely advised that the cost of their civilan shirts, and the cost of the modifications it a business expense.

I signed up a week ago. It improved my shopper rating with a few companies. Also I noticed I get more self assigned shops.

walesmaven Wrote:
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> Since we are not paying for anything, how are we
> enriching anyone? On another forum there is a Q&A
> about who, if anyone paid for or is making money
> with this. You might read before jumping to
> confusions.

Answer:
Advertising sponsors, favors, joint ventures, monopolies and kick-backs.