Hotel for Travel paid by MSC?

All of the shops nearest me are still far away! I know companies sometimes add travel for travel-related shops, but what about for regular shops - like car shops for example? If a hotel's not covered, how do you account for your travel expenses when going longer distances?

Edited 1 time(s). Last edit at 09/25/2023 09:54PM by interested.

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In almost all cases, it will be up to you to cover that expense yourself. You have to think like a business, and make sure your fees for the trip will cover the hotel, other expenses, and still turn a profit acceptable to you. You can offer to do those shops for a higher fee that pays enough to cover a hotel. They may accept. But mostly, they won't, knowing they can probably find somebody closer who may charge a higher fee than normal but won't have to charge enough to pay for a hotel.

Thank you! I appreciate your feedback. Makes sense.

You can deduct hotels and mileage as a business expense when you do your tax return.

That's great. Thank you! I'll get a new tax preparer because they didn't include my hotels last year - they said I didn't make enough with mystery shopping to do that and it would be a red flag. BUT my hotel stays were legitimate, so I'm definitely writing them off this year. Thanks again!

There's definitely a difference between a conservative tax return and an aggressive tax return.

Lots of tax laws can be considered grey areas with the right accountant. As long as you keep good records that's what counts

Question, did you pay any taxes on your mystery shopping income last year? Did you get any 1099s. If you did, the hotel costs would offset that taxed income as an expense. If you didn't, he was probably right.

I'm not an accountant. But someone here could probably tell you if a loss in your business could reduce your taxable income from a "real" job.

It might be your preparer was lazy, uneducated on all the tax laws or perhaps figured doing all the additional work would have cost you more billable hours than any gains.

Thank you! Yes, and mine was likely both -lazy and undereducated! To answer your question, I did make money and had 1099s from a few MSCs.

If it was the last couple of years, I think three, you should be able to file amended returns if your new tax preparer feels it would be worth it.

I'll do that! Thank you!

Edited 1 time(s). Last edit at 09/26/2023 05:06AM by interested.

No need to wait for the next tax year. File an amended return now.

@interested wrote:

That's great. Thank you! I'll get a new tax preparer because they didn't include my hotels last year - they said I didn't make enough with mystery shopping to do that and it would be a red flag. BUT my hotel stays were legitimate, so I'm definitely writing them off this year. Thanks again!

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

There have been horror stories on this site about shoppers who completed income tax return mystery shops and had shockingly incompetent preparers, even telling them to illegally not report income. I use a CPA, who only costs me $100 more than what I was paying to do it myself with Turbotax self-employed. It is well worth it!

Edited 1 time(s). Last edit at 09/28/2023 07:54PM by mjt9598.

I will. Thanks!

@interested, did you ask and understand why your tax preparer responded to you that claiming hotel expenses would be a red flag? Did you claim a profit or loss? This is not dependent on whether you received 1099s or not.

Good question; yes I claimed a profit.

NOT a red flag!

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.

Agreed! Thanks!

I would just say it needs to look reasonable. If you do a hotel shop across the country, it would probably look weird if you wrote off 3,000 miles of driving at 65¢ cents per mile for a $5 pay hotel shop with $200 reimbursement. I think if you really wanted to, you could easily write things off to make your "mystery shopping self-employed job" operate at a loss all of the time. Like wrosie said, there are a lot of grey areas, especially with mystery shopping.

Edited 1 time(s). Last edit at 09/30/2023 02:57PM by JimmyP.

There is a lot of gray area and the tax preparer is responsible to the IRS for what they put on a return they sign. For instance if you live in Maryland and go to Utah and make $250 doing shops and want to claim $150 in hotel expenses it is their responsibility to ask some questions about why you really went to Utah....

Edited 1 time(s). Last edit at 09/30/2023 05:29PM by bradkcrew.

Grey areas become clear when questions are asked and truthfully answered and revealed.

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