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If you file "Married File Separately" you are paying a lot more in taxes than if you file together. You just need to file a schedule C in only your name. Do you use tax software or do it yourself? I use TurboTax and it works great. It takes you through everything step by step. You have to buy the "Home & Business" version to do the schedule C. It costs about $100. It is well worth the money and a lot cheaper than paying someone else to do it. I have been using TurboTax and mystery shopping for over ten years.
You do NOT report income. below $600. Call the IRS. . Maybe you learned something today.
To clarify.... if you got 1099s from SE income of a total of, say $610, but also got $135 in SE income from MSCs that were not (due to the amounts earned) required to send a 1099 to you, you must report a total gross SE income of $745 on Schedule C. If you earned a total of $745 from several MSCs, none of whom paid you more than $600, you STILL have to report a total SE income of $745. Some shoppers think that if they keep the fees paid to them by any MSC, they then will not be required to report ANY income from SE.
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.
Shopping from the Carolinas to New York
Have video cam; will travel
Poor customer service? Don't get mad; get video.
Absolutely not true. Any earned income that is non zero must be reported.
@LindaK wrote:
You do NOT report income. below $600. Call the IRS. . Maybe you learned something today.
I'm wondering if you include unreimbursed expenses for a shop that you did but was told that you did not do it correctly so they're not going to be paying for the expenses of the food shop, such as a restaurant shop.
For the married filing jointly/separately comment: Don't listen to advice on this thread about how much taxes you are paying. Ask your tax preparer. Different people in different situations get taxed less filing separately vs. jointly and vice versa. Your tax preparer should be able to advise you which is more beneficial. When I worked at a CPA firm, we had a program that would tell us which tax was less based on the data we put in.
Secondly, for the person who did a shop and did not get reimbursed for something: You would still deduct any expenses related to that shop, including what you did not get reimbursed for. In the business world this is considered "bad debt." I would just classify the reimbursement as supplies and mileage as mileage or you can word it as bad debt. Either way.
Secondly, for the person who did a shop and did not get reimbursed for something: You would still deduct any expenses related to that shop, including what you did not get reimbursed for. In the business world this is considered "bad debt." I would just classify the reimbursement as supplies and mileage as mileage or you can word it as bad debt. Either way.
In my opinion, you have described a business expense. I include unreimbursed expenses such as the one yu described. My rationale is that I would not have spent the money (for food, or some souvenir) unless I was trying to make money as part of a mystery shop. I tried to make money. I drove there (mileage counts also), I spent money (not reimbursed), and I invested my time writing the report, Business expense!
@MissT48917 wrote:
I'm wondering if you include unreimbursed expenses for a shop that you did but was told that you did not do it correctly so they're not going to be paying for the expenses of the food shop, such as a restaurant shop.
Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008
I beg to differ. I suggest that you take your own advice and call the IRS. ALL income must be reported on Schedule C.
@LindaK wrote:
You do NOT report income. below $600. Call the IRS. . Maybe you learned something today.
Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008
I got the letter from the IRS. I conservatively reported and kept good records. The IRS wanted EVERYTHING.It was time consuming costly and nerve racking but in the end they gave me back money. The refund they gave me back was substantial but was not worth it
Then I started using a recommended tax attorney/ accountant. The IRS knows which firms have integrity and which try to over inflated and do not know if a deduction might be legitimate but put it in anyway.
I would rather pay a little more and not go through the expense and inconvenience of an audit. . The auditors tell you different auditors will accept a deduction and others will not . If you go to one federal court the judges use different rules than than other federal courts.
It is my opinion that we should have a federal sales tax where the merchant takes the appropriate tax at time of sale the way most states take sales taxes.
Then I started using a recommended tax attorney/ accountant. The IRS knows which firms have integrity and which try to over inflated and do not know if a deduction might be legitimate but put it in anyway.
I would rather pay a little more and not go through the expense and inconvenience of an audit. . The auditors tell you different auditors will accept a deduction and others will not . If you go to one federal court the judges use different rules than than other federal courts.
It is my opinion that we should have a federal sales tax where the merchant takes the appropriate tax at time of sale the way most states take sales taxes.
@Piled Hip Deep, PHD wrote:
It is my opinion that we should have a federal sales tax where the merchant takes the appropriate tax at time of sale the way most states take sales taxes.
A "Fair Tax" is what you are describing. Too bad it's not likely to pass. Even a Flat Tax would be a step up, but the Fair Tax would be better.
As long as you are not an employee and file with a schedule C mileage should be acceptable. Per my CPA sister. The key word is ‘employee’ and since we are not employees than we can deduct on schedule C. Don’t know if anyone’s mentioned that above as I only read a few comments.
Good luck to everyone on your taxes next year.
Edited 1 time(s). Last edit at 11/10/2018 07:03PM by Livingrisky.
Good luck to everyone on your taxes next year.
Edited 1 time(s). Last edit at 11/10/2018 07:03PM by Livingrisky.
Yes there are circumstances where one does not have to report their earned income. This is when your total income from all sources is below a certain amount for the year. The limit is low but if that is all you earned combining all companies you worked for and any other sources of income like investment earnings, pensions etc. then you do not need to report your income. In fact you do not need to file at all. So if all you earned is $601 for the year and had no investment or other income and are filing as an individual you do not need to file. The poster who keeps saying this may be in this low income category. Check the IRS rules on this for 2018 if you can find them if you are in a low income category. The IRS is evidently scrambling to figure out the new tax laws themselves.
Social security income ‘does’ get reported.. in fact it gets reported on line 20a of a standard 1040. There is a formula for how much, if any, is taxable in the IRS booklet and that formula uses your other income to determine how much SSI is taxable. So to the person saying she/he doesn’t report their SSI they need to speak with a tax professional.
Hello Linda,
I see you have gotten off to a great start to the forum. Here is a link to the IRS website that explains what veteran posters are trying to tell you: [www.irs.gov]
Under the heading Self-Employment Income it says, "It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.
All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.
Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer."
Even though I already knew the answer to this, I thought I would post this. Maybe you learned something today.
I see you have gotten off to a great start to the forum. Here is a link to the IRS website that explains what veteran posters are trying to tell you: [www.irs.gov]
Under the heading Self-Employment Income it says, "It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.
All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.
Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer."
Even though I already knew the answer to this, I thought I would post this. Maybe you learned something today.
@LindaK wrote:
You do NOT report income. below $600. Call the IRS. . Maybe you learned something today.
Kim
Most MSCs do not include reimbursements on your 1099, but there are some that do. It's up to the shopper to double check this to make sure that they deduct the reimbursements so they aren't taxed on it.
@johnb974 wrote:
"As far as reimbursement, this should Not be included as income. However, if it IS included as income on a 1099"...….reimbursement are NOT included on the 1099. They are NOT reportable as income. Reimbursements are not EARNED income.
That's simply not true. As posted above, YOU should take your own advice and call the IRS yourself. You are in for a shocker.
@LindaK wrote:
You do NOT report income. below $600. Call the IRS. . Maybe you learned something today.
One item keep keep track for a deduction is when the actual reimbursement for the required item does not fully cover the requirement. For example, I do a pizza shop that reimburses $12. In some pricey mall locations, the item costs about $12.26 with tax. I keep track of that 26 cents since it was an expense for which I was not fully reimbursed. I know this is more than most shoppers need to know. What is important is that you legally can't write off a $40 fillet when the shop requires that you buy a $10 burger.@johnb974 wrote:
Reimbursements are not reported
Also, I would never write off my travel costs from SoCal to Maui based on $100 in mystery shopping fees. You would lose an audit and a lot of sleep.
Shopping SoCal and Maui.
I've been out and this may be old news, but wanted to share a little more in detail about what I was saying before about reimbursements. Just something to keep in mind...
IF the MSC DOES include reimbursements as income on a 1099 that is issued to ME (and of course to the IRS), then I MUST also report this same amount as income on my Sched C. I then would subtract it by reporting it in the “other expenses” section of my Sched C, and list it as “reimbursed expense included in 1099".
The reason being: I cannot have a 1099 from ABC for $610, from XYZ for $720, and from PQR for $830, and then only show total income on my Sched C as $1400 simply because I know $760 (for example), of the $2160 total, was reimbursements. Just because I know this, the IRS doesn't. I must report it to match the 1099s, then make the adjustment. Otherwise, I'm setting myself up for an unwanted audit.
PS I just returned for the day from a route. Along the rural roadways, I passed numerous homes with little signs in the yards: "Share Kindness"
With kindness, I share...
IF the MSC DOES include reimbursements as income on a 1099 that is issued to ME (and of course to the IRS), then I MUST also report this same amount as income on my Sched C. I then would subtract it by reporting it in the “other expenses” section of my Sched C, and list it as “reimbursed expense included in 1099".
The reason being: I cannot have a 1099 from ABC for $610, from XYZ for $720, and from PQR for $830, and then only show total income on my Sched C as $1400 simply because I know $760 (for example), of the $2160 total, was reimbursements. Just because I know this, the IRS doesn't. I must report it to match the 1099s, then make the adjustment. Otherwise, I'm setting myself up for an unwanted audit.
PS I just returned for the day from a route. Along the rural roadways, I passed numerous homes with little signs in the yards: "Share Kindness"
With kindness, I share...
You must report all income, even if it’s under $600 and even if you have not received a 1099. How you could get into trouble is that if the mystery shopping company gets audited, they will have your Social Security number and how much they paid you. Of course, the MSC deducted from their income their expenses, which is YOU. The IRS will match it up and make sure that you have also reported the same amount. So, match it up!
I actually went to Maui and got paid $200 in fees. I do intend to deduct my air travel, food, parking, and car rental because that was the purpose of the trip. I imagine the auditor would be jealous of what we do, but it’s all above board and accurate.
Wrong, wrong, wrong. You have to report every single penny you make as income. Picked up a last minute $12 shop from a new company? It gets reported. Sell something on feebay for more than you paid for it? It gets reported. Belong to a bartering club where you make regular barters? The value gets reported. You have to pay taxes on all of it - millions on welfare are counting on you.@LindaK wrote:
You only have to report income over $600. Your 1099 will have everything you need to know. Any income elbow $600 does not have to be reported.
"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
I read this from a law site: Indeed, for most taxpayers, the chance of being audited is even less than 0.6%. For taxpayers who earn $25,000 to $200,000 the audit rate is less than 0.5%—that’s less than 1 in 200. Oddly, people who make less than $25,000 have a higher audit rate. This is because many of these taxpayers claim the earned income tax credit and the IRS conducts many audits to ensure that the credit is not being claimed fraudulently.
I did a tax shop in February. Tax Dude hit all the metrics, his fee came out of my refund, and my refund was significantly higher than had I done my own taxes. Great.
In May, I received a letter from the collection agency for the IRS stating that my account had been turned over to them. This was the day after I received my refund. I called them, thinking they had made a mistake. They said my ex underreported his 2015 income. Because we filed jointly (that was the only time we filed jointly), they said I owed $7,000. I asked what recourse I had. They said to set up a payment plan.
I called Tax Dude and told him what happened. He got me out of it using IRS laws I was unaware of.
I say all this to say: get a tax professional!
In May, I received a letter from the collection agency for the IRS stating that my account had been turned over to them. This was the day after I received my refund. I called them, thinking they had made a mistake. They said my ex underreported his 2015 income. Because we filed jointly (that was the only time we filed jointly), they said I owed $7,000. I asked what recourse I had. They said to set up a payment plan.
I called Tax Dude and told him what happened. He got me out of it using IRS laws I was unaware of.
I say all this to say: get a tax professional!
"I told myself to quit you; but I don't listen to drunks." -Chris Stapleton
Use Google maps. It gives you the mileage, then double for return trip. Take a screenshot, keep it on file w/ your tax return
The "millions on welfare" comment is snarky. How 'bout the federally funded or subsidized road you drive on to get to your mystery shop? Or the national park you like to visit. We all pitch in to fund the infrastructure that we all use. That's how it works, and that's the reason to pay our shares.
More on this good advice: You take expenses in the year you had them, income in the year you got paid. Most MSCs pay December shops in January. Now is a good time to start 2019 bookkeeping. You write off mileage expenses for December shops in December but if you get paid in January, that income is filed with 2019 statements. It is not hard if you keep an Excel spreadsheet (any 10-year-old can set it up for you.)@myst4au wrote:
Some MSCs pay a flat fee which includes the amount of required purchases. In those cases, I report the total amount (no choice if I earn enough to get a 1099), and then list the cost of the required purchases as reimbursed expenses / other expenses on Schedule C. That results in the reimbursed expenses being subtracted from my income. Easy to do. I use TurboTax and it walks me through the steps. I am sure that other tax preparation programs do so as well.
Other comments: The IRS requires a contemporaneous record of mileage. I record all of my trips in an Excel spreadsheet. In the same spreadsheet, I record the odometer reading on January 1 and on December 31. Averaged over 10 years, about 1/4 to 1/3 of my "income" is offset by mileage. This will vary from one person to another, but those of you who are not subtracting mileage are missing out an a large "deduction". I keep receipts for paper, ink, tape, etc.
Shopping SoCal and Maui.
@nmary wrote:
I actually went to Maui and got paid $200 in fees. I do intend to deduct my air travel, food, parking, and car rental because that was the purpose of the trip. I imagine the auditor would be jealous of what we do, but it’s all above board and accurate.
Hobby losses are not deductible. There is no business profit motive that can be demonstrated by writing off $5,000 in travel for a $200 in shopping fees. You may not call what you do a hobby, but that's what the IRS would fight back with.There has to be a realistic profit motive - IRS is wise to those who try to write off vacations as "business expenses." Of course, you first have to be audited. Lucky for you, Congress keeps cutting IRS funds.
Shopping SoCal and Maui.
Not really an apt comparison, but good try, person-using-a-second-account. A mandatory contribution to an individual's household budget is not the same as a mandatory contribution to something which benefits the whole. EBT is not infrastructure.@SoloAct wrote:
The "millions on welfare" comment is snarky. How 'bout the federally funded or subsidized road you drive on to get to your mystery shop? Or the national park you like to visit. We all pitch in to fund the infrastructure that we all use. That's how it works, and that's the reason to pay our shares.
Peak use was in 2013. It's been headed downward since then, and we are now at pre-2010 levels. Still the $ amount is literally 10x what it was in 1979. (source: [www.fns.usda.gov]).
Keeping this on topic, the IRS is actually one of those agencies who have been streamlining their functions and has steadily been reducing their budget year by year. We could reduce it much further by instituting a Fair Tax.
"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
Well, I just rechecked everything for the uptenth time and the only thing that I can see if that they do not know what they are doing the IRS that is. I mean if they bothered to check the SSN they would see that the ones related to me have nothing to do with the wife's work. All because I did not say that I was leaving the house and going to store stop A then store stop B then gas station stop C and then restaurant stop D followed by a postal stop E. Then Restaurant stop F and then stop G at home again. And I also need the address that I went to and the name of the place and what I did while I was there and I have to keep The W2 work separate from the 1099 work which I have to include because the company only paid 31 cents a mile and I drove over 19,000 miles in 2015.
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