Does anyone know the answer to this? Do you deduct for mileage if the shop is reimbursement only, like a Texas Roadhouse with no fee, but $35 reimbursement? Thanks!

I do.

Absolutely.

With the caveat, of course, that if you perform ONLY reimbursement shops, you'll show a loss year after year, and risk your "employment" being classified as a "hobby" rather than a business, thus losing all your business deductions.

@ceasesmith wrote:

With the caveat, of course, that if you perform ONLY reimbursement shops, you'll show a loss year after year, and risk your "employment" being classified as a "hobby" rather than a business, thus losing all your business deductions.

I am already at negative $1500 right now with mileage and don't want to get classified as a hobby. Most of my shops are reimbursement. A typical month is $200-300 in fees and $900 in reimbursements, or in the summer, $500 in fees and $1300 reimbursements.

Edited 2 time(s). Last edit at 07/10/2020 03:02PM by Niner.

I do, but I still show a minor profit at the end of the tax year.

It is a good idea to have a slight profit in 2 of the last 5 recent years to support a business justification on your taxes. .

I would keep track of them, and maybe make an adjustment at the end of the year if necessary to show a profit.

The benefit of "working" as a mystery shopper is that if you want to visit relatives in a different city by car, you simply have to do "something" in that city and it counts as business mileage. Would you drive 200 miles to eat Five Guys???

I don't. There is no income to deduct it from.

I do.

But Niner, aren't you one of the lucky few who qualify as "life style shopper" -- not really in it for the money?

Forgive me, please, if I have you confused with another.....

@Niner wrote:

@ceasesmith wrote:

With the caveat, of course, that if you perform ONLY reimbursement shops, you'll show a loss year after year, and risk your "employment" being classified as a "hobby" rather than a business, thus losing all your business deductions.

I am already at negative $1500 right now with mileage and don't want to get classified as a hobby. Most of my shops are reimbursement. A typical month is $200-300 in fees and $900 in reimbursements, or in the summer, $500 in fees and $1300 reimbursements.

I don't do this for the money. I am at about 16k reimbursements and fees. I am seeing about $150-$900 per month in fees and about $900-$1700 per month in reimbursements.

Edited 2 time(s). Last edit at 07/11/2020 03:47PM by Niner.

Okay, final for my first year:
$4587.62 in fees
$12,151.30 in reimbursements
Total $16,737.92

I would need to make about another 25k per year salary to cover this.

Edited 3 time(s). Last edit at 07/11/2020 04:52PM by Niner.

@ceasesmith wrote:

But Niner, aren't you one of the lucky few who qualify as "life style shopper" -- not really in it for the money?

Forgive me, please, if I have you confused with another.....

@Niner wrote:

@ceasesmith wrote:

With the caveat, of course, that if you perform ONLY reimbursement shops, you'll show a loss year after year, and risk your "employment" being classified as a "hobby" rather than a business, thus losing all your business deductions.

I am already at negative $1500 right now with mileage and don't want to get classified as a hobby. Most of my shops are reimbursement. A typical month is $200-300 in fees and $900 in reimbursements, or in the summer, $500 in fees and $1300 reimbursements.

Hopefully what I posted above answers your question. This is my first full year of data.

Edited 1 time(s). Last edit at 07/11/2020 04:12PM by Niner.

Yes. My bottom line is positive when I file my taxes. Sooooooooo.... yeah.

@Tarantado wrote:

Yes. My bottom line is positive when I file my taxes. Sooooooooo.... yeah.

I don't do this to make money, I do it more to get reimbursed for things I don't want to spend money on. If this is a true and needed source of income, your goal should be to have a positive number. Good for you, Tarantado. So, high five (?)

Edited 1 time(s). Last edit at 07/11/2020 04:56PM by Niner.

Could I just not include the mileage for the reimbursement only shops??

Nine, of course !

I always deduct mileage but I am pretty sure the rule for traveling is that you deduct from your base where you travel to. Now if your sole trip is for mystery shopping on a route and you do shops all along the way, that is one thing, But if you go to visit relatives or the ocean for a vacation 500 miles from your house you are not supposed to deduct 1000 miles round trip for one fast food restaurant while you are there. I try to be reasonable if i do a shop or two while I am out of town for a different reason. I would think the irs would not look kindly on a deduction of all the miles from home for a shop that pays $10 at your destination that you stayed at for a week.. That is, if you get audited.

Could I deduct for an ACL shop where I didn't get paid a fee, just reimbursed, but we drove 140 miles round trip? ($150 steakhouse, so we went near Philly)

Is there a certain amount we "should" so in profit? I'm anywhere from -$750 to +$950. Ugh.

Edited 2 time(s). Last edit at 07/11/2020 07:40PM by Niner.

Niner, all my advice is my gut feeling not fully based on irs rules...so aside from the fact that I really doubt i would ever drive 140 miles for dinner even if it was reimbursed unless i was going there for some other reason...this is how i feel....
You do not want to come to the attention of the IRS...you do not want to look suspicious on your tax returns and then have to go thru an audit if you can help it. You might pass the audit but it will be a big pita.
All your mileage is reported in one number, the irs will not see the individual trips and will not know you were assessing them 140 miles for that dinner with no fee. This is unless they see a red flag on your tax forms. They do want you to have a viable business, that means a business where you make some profit in actual dollars, not in donuts. If your business has been paying some amt of taxes every year and once in a while does not make money then they will give you a pass. But if you consistently earn a negative figure or only a few dollars then their red flags will go up and they might scrutinize your backup information.
A few years ago there was a discussion about people doing mostly or all only reimbursment shops. Some wise shopper (most likely SteveSoCal) pointed out that you could get away, if they asked, with saying you were practicing that particular shop so you could be able to better do similar shops for a fee. But if all you ever do is restaurant A 24 x a year with no fee and fast food B 50x a year with no fee etc and then charge off mileage and cell phones and whatever else that probably will not constitute a business . The aim of the business is to make money and the aim for the irs is to collect taxes. Whoever explained this a few years ago did a much better job then I am . But bottom line, I would advise making sure the profit you earn in $$ each year balances out the expenses you take..So if you are taking $20,000 in expenses and making a profit of $200 that, to me, if i were an irs agent, would not sound good. Maybe someone else can chime in with an actual number....But as was said before you can always not claim some of your mileage so as to show a profit.

Thanks, I really appreciate it.

How about deducting a plane flight where you go on vacation and then mystery shop a hotel for a few days and some meals?

@macrophage wrote:

The benefit of "working" as a mystery shopper is that if you want to visit relatives in a different city by car, you simply have to do "something" in that city and it counts as business mileage. Would you drive 200 miles to eat Five Guys???

Not so. According to the IRS, you cannot deduct expenses if the primary purpose of your visit is not business. You can't drive to Los Angeles to see your brother, pick up a 5 guys (or even airport shops), and write off the mileage. OTOH, if you plan a route from point A to point B and your brother lives near point B, you could make a reasonable case that the trip was shopping-related.

I would not deduct mileage/expenses for a reimbursement only shop as there is no income nor would I deduct mileage/expenses for a job from home where I was vacationing/visiting. If there was a fee, then yes but only from your base e.g. from my sister's home where I was visiting NOT 1500 miles from home.

My miniscule fees are reported with no mileage/expenses. 95 percent of the time, I am already there.

I have nothing like mileage for trips. If we were away from home and I did a mystery shop, I used the hotel as my starting point, so only had a few miles. I did have 150 milr round trips to King of Prussia, where the only reason was an ACL restaurant shop though.

I have often done shops with nice fees, traveling from my home, just outside of DC, to DE, Southern NJ and even NYC, using a reimbursement only hotel shop in southern NJ as the anchor for that part of the route. The next day, I might proceed 100 miles north to visit my nephew's family. From there, I would do several shops within 50 miles of his house, while staying there. Here is how I allocated the trip for IRS Schedule C purposes:
Part 1: Home to last shop in southern NJ and overnight there, all deductible mileage.
Part 2: NJ hotel shop to my nephew's home, personal (since there were no additional shops along that route).
Part 3 Several shops near my free overnight stay, mileage to and from those to his house, all deductible.
Part 4: Return trips from nephew's house. The portion from there to the northern-most shop of the part one shops, personal mileage.
Part 5: Mileage home from that last northbound shop to my home, all deductive.

And, all documented with contemporaneous records. This is a somewhat conservative way of dividing the mileage. Some would have included that miles that I did not, just because of the shops based out of my free lodging.

BTW, if I had taken my nephew and his wife out to dinner to thank them for letting me stay there, I understand that I could have deducted their meals "in lieu of hotel expense." (Per IRS opinion that I found years ago.)

Wales is, as usual, 100% correct.