Hello there,
I apologize in advance for my long post and I’m aware that not everyone here is a tax professional, but I would like to know your opinion and learn from your experience and how you approach the situation. I’m new to this whole MS adventure, and started almost a year ago with a couple of MS apps, then curiosity got the best out of me and started to research about other MS gigs and signed up with a couple of MSCs. Everything was fine, until I decided to give more thought and decided to research about the “pay taxes” part. I have a full time job and do MS during the weekends (or when I feel like). I was glad I tracked my mileage and any fees/reimbursement since the beginning, but here are my questions:
1. If I accepted a MS job after my 9-5 job, do I start tracking mileage from my work to the MS location? And once I leave that location and go home, do I count that mileage as well? There is some confusing information everywhere and some will say yes, that counts because my home is also my “place of work” (office). I don’t have a special room for the “office”, just the corner of a table I have in the living room.
2. Shop that pays a fee and also reimburse expenses, such as restaurants or gas stations where you have to purchase a small item to validate. How do I categorize this? The shop fee, understandable, but what about if I purchased an item, as part of the shop instructions, and I get reimbursed? Does this reimbursement count as income? And then some shops where you are required to purchase an item, but no return and you end up spending more than the “reimburse up to” fee to comply…do you count the “excess” as a business expense? For example item purchased cost $30 (because there was nothing under $15).
3. I went to see a tax professional for a consult, but I think I got more confused after I finished with her. She advised to deduct a % of my cellphone bill (because I use it for personal and MS - I have a couple of MS apps), about 30% of SMUD (because I’m using electricity to prepare my reports, etc.), % car insurance, mileage, etc.
4. Do you use tax software to report your taxes or do you rather go to a tax professional? I have been using a tax software (not sure if I can say the name, rather not, so I won’t be banned or deleted) for many years, when my taxes were so simple, but now with MS income, no 1099, made over $1000, it feels complicated and the software wanted me to upgrade to their “self-employment” version. Does anyone use this and how reliable it is? I’m afraid to trigger an audit when this MS income actually helps me supplement my current income.
What are your thoughts on these? Once again, my apologies for the long post and thank you so much for reading this and for sharing your experience with me.
Edit note: Sorry on question 3, I realized that I didn't clarify that she said "a percentage".
Edited 1 time(s). Last edit at 02/09/2018 12:54AM by Monique09.