@melindadarlene06 wrote:
Thanks for the information! I'm sorry this is my first year doing this. So what expenses can I deduct? gas, mileage, etc?
Thanks for you help!
There are others here who can probably be more helpful, but you can deduct: mileage, but not gas; office supplies used in the course of your mystery-shopping employment, such as ink, paper, pens, pencils; office equipment used in your business, such as printer, computer, digital camera, and phone (in proportion to their use); travel expenses such as overnight lodging and meals when necessary in the course of your self-employment; the percentage of your home you use for an in-home office, but only if that office is used solely for your business (IOW, you can't take the deduction if your office set-up is in your family room or bedroom, but if you have a spare bedroom whose only use is for your business, you can deduct it); and probably a lot of other things I haven't covered here. You can deduct the cost of office furniture for your in-home office IF that office is used only for your business.
When I mention percentages, let's say you buy a new computer and use it 50% for mystery-shopping activities and 50% for home/personal use. You can deduct 50% of the cost. Same with other office equipment. I'm really not sure about furniture, but I don't think you can deduct any of that if your office isn't solely used for business. My in-home office is separate from the rest of my house, and used only for my business, so I deduct necessary furniture costs.
If you end up with a profit after all those deductions, you can deduct a percentage of your housing expense (e.g., utilities) proportional to the amount of square footage you use for your office. Again, I believe that's only if your office is used 100% for your business, but I'm not sure.
Maybe somebody here can offer more clarity on both the furniture expense and the further home-expense deductions. As self-employed, we're lucky we can still deduct those expenses. W-2 employees who work out of their homes (such as salesman who don't live near corporate headquarters) were prevented in the tax overhaul of 2017 from deducting home-office expenses. Which really sucks.
I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.