I'm looking at getting a new computer and tablet as write offs. If you're out doing mystery shops and you stop for lunch is that a write off? I'm already writing off part of my internet and cell phone service.

I haven't done this full time for many years but when I did, I wrote off everything. If I bought a soda that was not reimbursed but was on my way to a shop, it was counted as a travel expense (I wouldn't have been buying that drink at that place if I was working in an office or if I was at home). If I was reimbursed for an item but the reimbursement did not cover the entire purchase, I counted the overage as a business expense. I know people that work other jobs requiring travel that write off their food, so I'm pretty sure yours would be a legitimate expense. You will hear tons of different opinions but if you use software and do your taxes yourself, you can usually submit questions like that and get the "IRS approved" answer in writing. If you know an accountant, or can book a few minutes with a decent one, they will probably answer a list of questions for you. The laws change all the time, unfortunately.

@johnb974 wrote:

I'm looking at getting a new computer and tablet as write offs. If you're out doing mystery shops and you stop for lunch is that a write off? I'm already writing off part of my internet and cell phone service.

If I can write off the meals, I'll eat at better places than Jack in the Box, McDonalds or Starbucks.

There are many different opinions on this matter. The IRS guidance says deduct meals only on overnight trips away from the general area of your home. Some argue the actual rules don't state this, and will justify deducting meals while working away from home even if they don't stay overnight. I personally take a middle ground and will deduct meals if I have a route that takes me away from home substantially longer than an ordinary work day. Talk with a tax professional and don't rely on what I say.

This is the most current IRS information about meals: [www.irs.gov] Note that for the remainder of this year, 100% of the meals can be deducted, rather than just 50%. And note this phrase pertaining to what kind of meal can be deducted, "...the expense is not lavish or extravagant under the circumstances".

As far as your computer, if it is being used for your business (mystery shopping), then it can be deducted. You can either depreciate it or you can expense it all in the first year under Section 179 (https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act). IMHO, it is likely that all of "us" should be using Section 179.

There is a boatload of information in IRS Publication 535: [www.irs.gov]

Why is no one mentioning vehicle mileage? Is that just understood and we are not mentioning it?

The OP only asked about food so I thought mileage was understood. Mileage is definitely a biggie at $.585 cpm this year (and probably higher next year if gas doesn’t plummet).

@hbbigdaddy wrote:

Why is no one mentioning vehicle mileage? Is that just understood and we are not mentioning it?

Edited 1 time(s). Last edit at 05/17/2022 05:07PM by patman9760.

I'm also surprised that no one has mentioned office supplies, paper, printer, etc yet. I don't print out most of my assignments but there are few that require print outs and write all of that off. I also have a paper planner for the year I write off because I use it to schedule my shops. You write off pretty much anything you use for the business.

Any and all that are legal deductions, require me to run my business, and that lower my taxes. Consult with a tax person or read the IRS publications if you plan to prepare your own taxes. Turbo tax will walk you thru everything.

My understanding of the new tax codes, if you use your computer for more than 50% of the time for business, you can write off the total cost of the computer.

I use Turbo Tax. They were the ones who pointed out writing off my Medicare payments as a business expense.

My business expenses are mileage, hotels, travel meals, printer, paper, ink, pens, copies, notebooks, cameras and accessories, the business-use portion of my cell phone plus service and accessories, the business-use portion of my home internet, my laptop, computer and accessories, tolls, parking, software and apps used for mystery shopping, packing tape, bank fees related to my business account, business-use portion of vehicle loan interest, and more recently a home office deduction. I also deduct the amount I pay as a self-employed person for health and dental insurance from my AGI (not as a business expense.)

Edited 1 time(s). Last edit at 05/17/2022 08:45PM by mystery2me.

I do not write off most of what is mentioned above as I am quite part time however I do write off mileage and my voice recorder, rechargeable batteries and the charger as necessary.. That I use exclusively for mystery shopping.
Part time mystery shoppers , do you take a small percentage of the office equipment and such to write off?

Of course. I take every legitimate deduction that I can. In my case, the percentage is not small, but even if it was, I would want to take the deduction.

@sandyf wrote:

Part time mystery shoppers , do you take a small percentage of the office equipment and such to write off?

@mystery2me wrote:

There are many different opinions on this matter. The IRS guidance says deduct meals only on overnight trips away from the general area of your home.

Can you cite the explicit section of the code that states this? I've been self employed in one capacity or another for about 40 years, and have never heard this, except on this forum. I've never found the documentation. The sections I've read state you can deduct meals taken while away from home on business, and all of my tax professionals have always asked for my meal expenses so they could deduct the 50%. The IRS doesn't expect a person to not eat if out on the road for business, and they don't expect you to pack your lunch and carry it in a cooler. If you're conducting legitimate business, having a meal and deducting it is allowed--as long as, as mentioned in this thread, it's not extravagant; it has to be a "normal" meal.

Let's say you're not a mystery shopper, but a business consultant, and you do a one-day trade show for a client. You can't leave the building to go home to eat, you can't bring your lunch because there's no refrigerator, etc. You have to eat. Why would that *not* be a business expense?

There seems to be a lot of confusion and misinformation about this topic, and I'm not sure why. It kind of seems a common-sense kind of thing.



Edited 1 time(s). Last edit at 05/20/2022 04:40PM by BirdyC.

In lieu of an actual overnight stay, the "rules" say, "...at least long enough to require a stop for sleep or rest."

So if you're "on the road" for several hours, or working away from home for several hours, and you need to stop for a break, you can eat a meal and have it be deductible.



Edited 1 time(s). Last edit at 05/20/2022 04:55PM by BirdyC.

@BirdyC wrote:

@mystery2me wrote:

There are many different opinions on this matter. The IRS guidance says deduct meals only on overnight trips away from the general area of your home.

Can you cite the explicit section of the code that states this? I've been self employed in one capacity or another for about 40 years, and have never heard this, except on this forum. I've never found the documentation. The sections I've read state you can deduct meals taken while away from home on business, and all of my tax professionals have always asked for my meal expenses so they could deduct the 50%. The IRS doesn't expect a person to not eat if out on the road for business, and they don't expect you to pack your lunch and carry it in a cooler. If you're conducting legitimate business, having a meal and deducting it is allowed--as long as, as mentioned in this thread, it's not extravagant; it has to be a "normal" meal.

Let's say you're not a mystery shopper, but a business consultant, and you do a one-day trade show for a client. You can't leave the building to go home to eat, you can't bring your lunch because there's no refrigerator, etc. You have to eat. Why would that *not* be a business expense?

There seems to be a lot of confusion and misinformation about this topic, and I'm not sure why. It kind of seems a common-sense kind of thing.

All I'm saying is the IRS defines business travel one way, to include an overnight stay or substantial rest period, and many poeple including some tax professionals define it another way. The tax courts have the final say, and this matter has not been fully adjudicated, to my knowledge. I agree with your tax professional to an extent, but she also cannot cite an explicit section of the code other than "ordinary and necessary expenses of traveling away from home."

[www.irs.gov] Publication 463, Page 3, Travel Away From Home

As far as meals during an ordinary work day not related to travel, I think there would have to be justification for why a business person should be able to take the deduction when a regular employee could not. And, yes, a lot of people pack their lunch and carry it in a cooler.

@mystery2me wrote:

As far as meals during an ordinary work day not related to travel, I think there would have to be justification for why a business person should be able to take the deduction when a regular employee could not. And, yes, a lot of people pack their lunch and carry it in a cooler.

You're right in that a business person normally can't take a meal deduction during an ordinary work day. If I go out to lunch by myself when, say, previewing local houses to show clients and stop to eat, that's not deductible. Or I do a mystery shop 5 miles from home, get hungry and stop for a quick meal. Not deductible. Common sense.

But if you're engaged in a legitimate business activity and are away from your home base for several hours, you can take the meal deduction. Such as working that trade show for your client or feeding your own clients. You, the business owner/sole proprietor, must be present (you can't hand your client or customer a $50 and send them off to eat, then deduct it!), and there are other parameters around that. A regular employee can't take a deduction unless the employer doesn't cover the entire expense, from what I gather.

I understand that some people pack their lunches. But the IRS doesn't require or expect it. And there's discussion about what "several hours" are. But I trust the tax guy I use now, and the other ones I've used in the past. They've all been CPAs but one (and her I didn't trust!), and I always felt confident that they weren't letting me break the IRS rules!

If you're using the time at the restaurant going over your shops and routes or looking for shops in the area...than it is a business deduction.

I’ve posted this before but I think it’s worth repeating. I find many people believe a tax write off is worth more than it is. A write off is not a dollar for dollar tax savings. You can only use qualified business expenses to reduce your business income and not the tax that is due. So any expenses that are legitimate write offs will only reduce your taxes by your tax bracket which is generally 15 to 25 %. A tax write off is not a tax credit. I would not want to increase the chance of an audit for such a small benefit.

@kenasch wrote:

A tax write off is not a tax credit. I would not want to increase the chance of an audit for such a small benefit.

It's not, of course, a tax credit. But I truly don't understand why people think taking a legal, legitimate meal deduction is risking an audit. My husband and I travel on business overnight two or three times per year. Sometimes one night, sometimes two. We can end up with a hundred to a couple hundred dollars in meal expenses each trip--while trying to keep the tab down so they're not extravagant. For last year and this, we can take the full 100%. That adds up and can reduce our tax burden, in combination with our other deductions, quite a bit.

I've been taking meal deductions against my self-employment income for around 37 years and have never been audited. I mean, it's not like I claim thousands in meal expenses, but definitely hundreds.

I don't mean to be contrary, but this is something that I just take for granted due to all these years of tax professionals telling me I can and I'm not violating IRS rules by doing so. I'm thinking they can't *all* be wrong. If there were divided opinions on this among them, I might be nervous. But they've been unanimous. So I'm just going by what they say.

ETA: While we do the overnight stays, when everyone agrees meals are deductible, we sometimes do trade shows where we have to leave at 7 a.m. for an 8 a.m. setup, then tear down at end of day and drive many miles home. By the time we're done, we've put at least 10 hours and have had to eat lunch at the venue and dinner on the way home. We take those meals as deductions, and I'm confident it's legal.



Edited 2 time(s). Last edit at 05/21/2022 04:31PM by BirdyC.

@hbbigdaddy wrote:

Why is no one mentioning vehicle mileage? Is that just understood and we are not mentioning it?

I used to take the standard mileage deduction until the trump tax revisions (in 2017 I think) ended my mileage tax deduction except for out-of-state job mileage

@AZwolfman wrote:

@hbbigdaddy wrote:

Why is no one mentioning vehicle mileage? Is that just understood and we are not mentioning it?

I used to take the standard mileage deduction until the trump tax revisions (in 2017 I think) ended my mileage tax deduction except for out-of-state job mileage

Mileage is still deductible for self-employment. The 2017 tax changes to miscellaneous itemized expenses affected W2 employees.

Edited 1 time(s). Last edit at 05/21/2022 08:49PM by boridi.

W-2 employees really got the short end of the stick in 2017. They can't take home-office deductions, even if their employer's offices are located remotely. So, field salespeople, for example, who may live a couple hundred miles from their employers and who have a home office, can't deduct expenses. And I believe they can't claim auto expenses (if they claim actual expenses and not mileage), either. Apparently the (erroneous) assumption is that if you're a W-2 employee, you can work out of your employer's facility and you don't need a home office. What a joke.

My tax guy says that companies should pay these folks more money and give them company cars to make up for the loss of deductions. I agree.

@BirdyC wrote:

W-2 employees really got the short end of the stick in 2017. They can't take home-office deductions, even if their employer's offices are located remotely. So, field salespeople, for example, who may live a couple hundred miles from their employers and who have a home office, can't deduct expenses. And I believe they can't claim auto expenses (if they claim actual expenses and not mileage), either. Apparently the (erroneous) assumption is that if you're a W-2 employee, you can work out of your employer's facility and you don't need a home office. What a joke.

My tax guy says that companies should pay these folks more money and give them company cars to make up for the loss of deductions. I agree.

Not only that, some companies want to pay people who work from home, according to where they live. If you live in a low rent area, they want to pay you less. You're hired for your skills, not for where you live.