New tax break for 2019

Does anyone have any knowledge as to whether this new tax break for 2019 will apply to mystery shoppers? If it does, it could be a substantial break for many of us. What do you think??

[www.forbes.com]

Shopping up and down the Colorado Rocky Mountain front range.

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It looks as though we should be eligible but that certainly does not mean we are or will be. I trust TurboTax to have sorted out with IRS what will and will not be allowed and have tentatively begun doing my 2018 return trial run for year end planning. Forms on some of the Schedule C things are not yet available and indeed the list of questions for 2018 seems very much longer than in the past (so much for simplifying the tax code!) but until I can wade through I won't see if it is doing something new and different.

The newest change I witnessed is Real Estate taxes have gone down a couple hundred dollars...not knowing who changed this or if it's a CA thing, I'm happy.

Live consciously....

@Irene_L.A. wrote:

The newest change I witnessed is Real Estate taxes have gone down a couple hundred dollars...
Someone from your housing development must have asked for a re assessment Irene. I paid my tax bill just the other day and it not lower...it is higher. And for those of us in California who used to itemize to take advantage of tax breaks for high state and local taxes and big prop tax bills, we can no longer get that break as it tops out at $10,000. Not even close as prop tax for someone buying their house in the past 10 years or so is much higher than that,

SandyF.....Not as simple as someone asking for a re-assessment and it happening immediately, just wouldn't happen. I am talking about property taxes which might be different in my county than L.A. County. I am very surprised in a good way, have the bills to prove it.

Live consciously....

My taxes also went up. I am in San Bernardino county.

While I think shoppers have enough deductions and small enough income that the break might not help that much, the tax break in question is actually good news for other job. I will be losing the ability to write off things that account for just under 20% of my income...and I may fare better.

As far as the property tax; I think it's like the payroll taxes that keep shifting in CA as people start to figure out the rules of the new code. My paycheck may be a bit higher but my tax liability may be as well. I'm both terrified and interested in a few weeks to put all of the numbers together and see where it ends up.

Tax's were supposed to go down with this year with folks getting a bit more on their paychecks...we'll have to see if it's a one time thing.../however, CA is it's own entity. I pay (normally) $4400 a year for my Townhouse taxes, and this year the bill saved me 200.00. Gas prices came down a bit as well. Food is going up, so it's a wash.

Live consciously....

More in the paycheck does not necessarily equate to a lower tax burden, though. File your taxes and see where it ends up...you could be paying more on the back end.

Seniors (65+) get to keep money, used to be pay 1.00 for every 2$ made, good in my book.

Live consciously....

Has anyone filed their taxes yet to determine if our mystery shopping as an independent contractor meets the requirement for the 20% deduction?

Shopping up and down the Colorado Rocky Mountain front range.

I haven't filed my taxes yet but started working with my TTax app. and as I understand it, I don't think we can deduct for home office expenses. Am I correct in that? If so, that's going to suck when it comes to reducing income. And if it is true, I'll rethink whether I want to continue as a MS'er.

Disregard my previous post - went back and checked TTax again and found the Home Office part. However, it appears that they are stricter about the definition of the home office. I think they are more restrictive. How are the rest of you dealing with this issue. I do use my home office for both personal and business.

From Turbo Tax:
Exclusive Use Test

Generally, in order to meet the exclusive use test you must use a part of your home only for business purposes. This means once you set up your home office, you can't use that space for personal reasons, such as paying bills or allowing the kids to do their homework there.

Edited 1 time(s). Last edit at 01/24/2019 09:16PM by plmccut.

I filed my taxes yesterday using HRBlock online and it populated the 20% deduction for me.

From Turbo Tax:
Exclusive Use Test

Generally, in order to meet the exclusive use test you must use a part of your home only for business purposes. This means once you set up your home office, you can't use that space for personal reasons, such as paying bills or allowing the kids to do their homework there.[/quote]

The above has been the rule for some years now. It is not new.
I think we are all in for surprises this year both to the upside and the down. I am thinking that for me it will definitely be a bad surprise so I guess I am set up to be happy if it does not turn out that way. But with state tax and prop tax capped even I, who have owned my home for over 30 years so have a smaller than average prop tax, will be caught by that new max in this high tax state.
As a lifestyle shopper most of what I "earn" is written off in reimbursements and mileage deductions so the 20% will not have much impact. If the reimbursement allowance is ever stopped or taxed we lifestyle shoppers are in for a big change in our tax picture.

I've never used the office expense for fear of being audited and having to deal with it. I'm hoping that we can take the 20% off of the revenue earned after subtracting our expenses, which for me is mainly mileage.
I'm also wondering if it has any bearing on whether or not you shop part time with
your main source of income being earned as an employee. I work full time but make about 10k shopping annually.

Shopping up and down the Colorado Rocky Mountain front range.

I filed my taxes yesterday using HRBlock online and it populated the 20% deduction for me. I had about 75% W2 income and 25% 1099 and I got the 20% deduction off the qualified 1099 income.

I have a room that is used exclusively for my office and nothing else. It houses my desk, computer, printer, and peripherals. I use the home office deduction as long as I am renting the house. It gets complicated if I would use the home office deduction when buying a house.

@AZwolfman, why is there a difference between renting and buying?

Depreciation.

You take depreciation if you own your home; you don't if you rent.

You have to recoup the depreciation if/when you sell your house, if you've taken a depreciation for a home office. So say you have a home office for 20 years, and take
$10,000 in depreciation. That deduction you've taken become taxable income.

CAVEAT: This is a GROSS OVERSIMPLIFICATION.

@Jill_L wrote:

@AZwolfman, why is there a difference between renting and buying?

Ceasesmith answered this question above.

Edited 1 time(s). Last edit at 01/27/2019 06:15AM by AZwolfman.

I am sure glad l never CNN laimed an office. I would hate for anything to touch my equity.

Shopping up and down the Colorado Rocky Mountain front range.

@ceasesmith,

Thanks. Makes perfect sense. I never claimed a "home office" before....

No idea if this is true, but I've heard that taking the home office deduction makes you more likely to get an audit since so many people misuse this. This likely is a rumor though.

Not only a rumor, a misinformed rumor.

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.

So in TurboTax, should this questions be answered YES or NO for Mystery Shopping:

"Is this activity a qualified trade or business?"

I've always considered MS to be "Consulting" (“Performance of services in the field of consulting means the provision of professional advice and counsel to clients to assist the client in achieving goals and solving problems.“)

Is that "qualified" under the new tax laws?

Thanks!

Yup

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.

As Walesmaven said, the simple answer is, YES. This is quoted from an article in Forbes, "Section 199A defines a qualified trade or business by exclusion; every trade or business is a qualified business other than: The trade or business of performing services as an employee"
which discusses the 20% pass-through deduction (yes, we each qualify): [www.forbes.com]

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

@COMystery wrote:

I am sure glad l never CNN laimed an office. I would hate for anything to touch my equity.

Correct. I have never made a home office deduction because I'd have tax consequences when I sold my house.

Yes, taking the home office deduction for a home you own *might* require you to recoup the depreciation when you sell your home, but this is unlikely for most. For it to matter, you would have to make a profit of more than $250,000 when you sell your home ($500,000 if married,) assuming it was your primary residence and a few other caveats. This is certainly possible in some cities and neighborhoods where home values have skyrocketed, of if you bought the home decades ago, but for most of us it is unlikely we will have to worry about it. The tax laws could always change, of course.

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