I was wondering how companies I have shopped for do their 1099s
As a mystery shopper I have done shops for many companies but am not sure
how my earnings will be reported. Any informaion would be helpful

If you have done $600 or more work for a company in the calendar year they must send you a 1099. Regardless of whether they send one or you did not earn enough for them to send one you are responsible for reporting all fees and bonuses earned. There is a tax thread in the New Mystery Shoppers section.

kprac Wrote:
-------------------------------------------------------
> I was wondering how companies I have shopped for
> do their 1099s
> As a mystery shopper I have done shops for many
> companies but am not sure
> how my earnings will be reported. Any informaion
> would be helpful


Is waht you mean about reimbrusements vs. fees? Some companies link them both together as "earnings". In that case, you need to hav paperwork to adjust for the difference. An excell spreadsheet could do you well if you set it up to track ths stuff.

kprac,
When you get your payments from each company, I advise you to break out reimbursements and fees on a spreadsheet, or in yout money management program, or just in your checkbook notes on deposits, In addition, you need to keep track of your expenses, in cluding reimburseable ones, throughout the year. If you have not done so this year, you have time to backtrack through your accounts to try to make the best of it before you start your taxes. Then, start the New Year off right with some way of noting all fees and reimbursements and expenses, daily, so that no matter how any MSC might report, or change their way of reporting, you will have THE definitive record for tax purposes. The IRS gives "great deference" to contemporaneous records kept by a taxpayer, so your daily diligence is totally worth the effort in case you are ever challenged.

I did restaurant reimbursement only for a mystery shop. Will that be reported as income if it is over $600?

No.

1099s should be issued ONLY for fees and bonuses. Should you receive any 1099s you probably want to review them for accuracy. Realize that the company will issue them for PAYMENTS MADE in calendar 2010 and they will not exactly jive with what you EARNED in 2010. What I mean is that if you did work in November and December of 2009 that was not paid until after January 1, those amounts would be reported as 2010 1099 income to you. Similarly if you earned fees in 2010 that were not paid until 2011, they will bee considered for 2011 1099 income.

Kittybrant,
Do be sure to examine your records and the 1099s carefully. Some MSCs issue erroneous 1099s that may include reimbursements.

If that happens, notify them and request an amended 1099. If that does not come in time to file your tax return, you can attach an explanation as to why the 1099 amounts do not equal the income claimed on your Schedule C. I ahve added a handwritten note right on the Schedule C saying something like, "XYZ company erroneously reported reimbursement as income." I have NEVER had a peep out of the IRS on such matters.

Walesmaven: Thank you. Have you personally had incorrect 1099's. It has not happened to me yet. Although this year, I have larger reimbursement shops.

I have been self employed for about 35 years and have had many, many erroneous 1099s.



Edited 1 time(s). Last edit at 12/06/2010 03:00PM by walesmaven.

As a self employed person, you can file a Schedule C Business form listing your yearly income and expense totals and vehicle mileage. It will show as a profit or loss on the Schedule 1040.

Re: reimbursements being reported as earnings, while that is technically incorrect, it seems to me that you can compensate for that by claiming the purchased item as an expense, so that it evens out.

I understand that it may well be technically incorrect. The exact verbiage for line 1 is of Schedule C is "Gross Receipts or Sales". My receipts, between Paypal, Direct Deposit and Checks deposited is very much like the totals off the cash registers in a retail establishment. In a retail establishment they would then deduct the cost of goods sold and returns. Of course I have neither of these but rather have amounts being reimbursed. If every company I worked for sent me a 1099 to 'prove' my income portion of receipts, I would be in great shape. The issue is that they do not. Thus my shopping does not really fit a Schedule C properly and it becomes time to try to make the full transaction activity as transparent as possible.

My gut feeling is that showing $12,000 as 'gross receipts' and subtracting out $6000 as reimbursements and $5000 for mileage and $600 for other expenses looks a lot more "real" as a 'legitimate business' than showing $6,000 as 'gross receipts' subtracting $5000 for mileage and $600 for other expenses, even though it gets to the same bottom line.

I gather that a whole lot of the audit process with IRS is automated to set up flags if 'line X is equal to or exceeds line Y or line Y exceeds line P by 20%'. Thus, philosophically, I want my 'gross receipts' to be as high a number as possible with the comfortable understanding that very few businesses show much of a paper profit once legitimate expenses have been deducted. The tax code over the years has been rigged to favor businesses and the wealthy, so the more one can use the tax loopholes opened for them, the better off one will be vis-a-vis taxes.