First, I DO realize this is not a tax forum! But, I think my questions are pretty basic so I’m just hoping for some helpful answers.

1) Do the 1099s sent to you show the total amount paid to you, or the amount paid excluding reimbursements?

2) On Schedule C box B there is a code for your principal business code. I’ve read through the list and am not sure which to use for mystery shopper/audit/merchandising/etc. Which code do you use for your returns?

3)
3a). Do most of you enter the total paid to you, including reimbursements, at the top (line 1) and then the amount you spent below in expenses? Or do you enter the amount paid after subtracting the reimbursed expenses at the top?
3b) I’m curious, because none of the expense lines seem like they are appropriate for these required expenses. But also, I have incurred expenses that were not reimbursed as well. Would they all go under Commission and fees or do you list them as other expenses in Part V which would be line 27a (total from line 48).

Thanks for the help.

I'm a first year shopper myself (started in August) so I am wondering some of the things you are, but I am pretty certain reimbursement is not taxable so your documents should only include fees. Also, I believe you will only receive tax documents from MSCs for which you earned $600 or more in tax year 2019. For those MSCs where you earned less than $600, you're just going to have to be honest and declare your earnings without paperwork (hope you kept track).

I'll now defer to people more experienced and better informed than I am.

1. It varies by MSC, as the IRS doesn't care how they report it, as long as all the required info is on the 1099. For example, Maritz does not; but Intelli-shop does. This makes it extremely important for your own record keeping to be elegant, precise, AND contemporary.

2. 541600 (something to do with small business consultant).

3. I enter the gross amounts I am paid, and list all my expenses. Part V allows you to list the category of expenses and the amount, so you can describe your expenses there. There used to be an entirely separate form for automobile expense and mileage, which is, by far, my greatest deductible expense. This year, it's just a few lines in Part IV.

"Do the 1099 forms show the total amount sent or just the taxable amount?" - The 1099s SHOULD show only the fee + bonus. In the past I have had some MSPs that the 1099 reported everything to IRS--fee, bonus, reimbursement. I even had one MSP include the fees they paid to Paypal to send me my payment as a 1099 expense to me.

Rarely does even a properly prepared 1099 accurately align with your meticulous records because of pay dates. They will reflect prior year work paid for in the current year and current year work paid before 12/31. Don't worry about it. Lets say you have 3 1099s. List them on your return. They total to $X. Your records show $Y as total fees plus bonuses with your supporting documentation. Subtract $X from $Y and consider that your total taxable receipts and enter that as your non-1099 income. You now have accounted for every penny of income between the 1099s and the self statement.

The code really is almost irrelevant. Years ago I used 541910 and have never been asked about it since. I'm not sure if that code even exists anymore.

Most of the categories on the Schedule C do not apply to shoppers. Advertising? Commissions & fees? (we can't subcontract to be paying someone these), etc. If you take your computer for repairs you might have a 'repairs and maintenance' item, but expenses of using your car are specified elsewhere. There is, however, a Miscellaneous expenses area and this is a useful catchall. My personal preference is to claim every cent I get from the companies and then create a line item called "Reimbursed business expenses included in income" in the expenses section of the Schedule C where I subtract out all reimbursements. I do this for two reasons: First it makes the income line of the return more feasible as being a job rather than a hobby. Second, my statement of "Reimbursed business expenses . . ." pulls out all those reimbursements and makes a following line item I create called "Unreimbursed business expenses" more feasible and logical, I believe. Whenever you do a flat fee job and are required to make a purchase, that purchase becomes an unreimbursed business expense. Similarly, if you are being reimbursed 'up to $1' and walk in the store to find that the cheapest item you can reasonably locate is $5, you must spend $4 more than you are being reimbursed to be able to get the job done. I claim the $4 as an Unreimbursed business expense. You do a job where you are required to purchase a regular burger, small fries and small soda and are reimbursed 'up to' $4 and the price for those items comes out to $4.93, you have an unreimbursed business expense of 93 cents.

I just got a 1099 from a company (Comscore, formerly Rentrak) that included expenses as taxable, even though they formerly did not include expenses. I complained to the contact there and he spoke to the person who generated them and she refused to change it. Fortunately he had a spreadsheet which included the taxable and non-taxable amounts that he sent to me. Fortunately (?) they have just gotten out of the mystery shopping business, having lost their last client, so I guess this is the last year I will have this problem for them.

Meanwhile I got an email from IPSOS saying that they made a mistake and included non-taxable amounts on their 1099's for shops done in Shopmetrics and will be correcting them. At least they acknowledged their error.

@MisterBill wrote:

I just got a 1099 from a company (Comscore, formerly Rentrak) that included expenses as taxable, even though they formerly did not include expenses. I complained to the contact there and he spoke to the person who generated them and she refused to change it. Fortunately he had a spreadsheet which included the taxable and non-taxable amounts that he sent to me. Fortunately (?) they have just gotten out of the mystery shopping business, having lost their last client, so I guess this is the last year I will have this problem for them.

Meanwhile I got an email from IPSOS saying that they made a mistake and included non-taxable amounts on their 1099's for shops done in Shopmetrics and will be correcting them. At least they acknowledged their error.

These things are not problems if you have your own records of fees/reimbursements.

And over the years it has become easier to document your reimbursements because I can think of no company that requires you to mail in your receipts any more. When I scan my receipts they become part of my permanent records for the year. I also save the original receipts but, as you know, after a few months they fade away to illegible

The problem with this particular shop is that it was the one where they got access to my cable box (I saw a bunch of discussions about it a couple of years ago) and checked stuff on a weekly basis. It paid $100 but they considered $25 payment and $75 reimbursement for my cable service. That was an arbitrary decision on their part since the always just said that the payment was $100/month.

I also did another shop for them where I had to purchase TV episodes on iTunes and got reimbursed for them. That's easier to split out.

A copy of the information about the shop offering $25/$75 is what you need for IRS to back up your split of the $100 between fee and reimbursement.

In other words, keep a copy of everything just in case.

@Flash
A copy of the information about the shop offering $25/$75 is what you need for IRS to back up your split of the $100 between fee and reimbursement.[/quote wrote:

@2stepps wrote:

In other words, keep a copy of everything just in case.

@Flash
A copy of the information about the shop offering $25/$75 is what you need for IRS to back up your split of the $100 between fee and reimbursement.[/quote wrote:

Precisely, and computer memory is cheap. I work for MSC XYZ so have a folder in my mystery shopping menu for XYZ. The first time I do a new-to-me shop I print everything to pdf and save it in the XYZ folder. If there is an email stating price/bonus offered, I print to pdf and save in the XYZ folder. When I report the shop I write up major narratives (if any) in Word and save them in the XYZ folder. If I can conveniently print the report to pdf, I do so and save it in the XYZ folder. The receipt and any collateral materials are scanned to jpg and saved in the XYZ folder. Everything else is handled on my spreadsheet, which records date the job was done, what, for whom, mileage, fee, bonus, reimbursement, date paid and the amount paid.