I am a new shopper. I work full time and decided to try this as a possible tax credit for my husband and I. I have only completed 6 shops so far and I am surprised at how much work is involved with this type of job. Can anyone recommend a software to help keep track of shops, costs and income? How do you become silver certified? What type of business license is required in CA? Thank you if you have any tips and tricks. I will be very grateful for any advice. Thank you.

you cant use this as a tax credit if you have a full time job. They will disallow the deductions and you will owe the back taxes and penalties.

I have spoke to my tax person and he says yes, you can in California. It's a business, it's an allowable deduction. Why do you think not?

It's an allowable deduction against your other income IF you are operating as a business and IF you are trying to make a profit but haven't been able to. The fact that you say that you "decided to try this as a possible tax credit" is saying right there that you're not trying to make a profit, you're hoping to get a tax loss while enjoying a lot of free meals (or whatever).

Anyone can write off a loss for a year or two but if you get audited and can't show how you expect to ever make a profit, they can disallow the losses (retroactively) and require you to report the income as a hobby and you will be limited to writing off expenses only up to the amount of the income.

The purpose of a business is to make money, not lose money. Going into something hoping you'll lose money is not going to win any points with the IRS.

So, yes, your tax person is right that you CAN deduct losses, and yes, techman is right that you could lose the deductions if audited. Then it will be up to you to show how you expect to make a profit doing this. If you can prove your "profit motive" you'll be okay. If not, they will disallow the losses. Go read on the irs website, not every tax preparer knows the difference between a business and a hobby engaged in for profit. Mine does, and explained it to me very well (and I've read it myself). Yours may not be familiar with this part of tax law. Or you may have asked the wrong question, without telling him you hope you'll lose money at this so you can write off the loss. If you just asked, "Are business losses deductible?" of course he'll say yes. What needs to be determined is not whether business losses are deductible, but whether what you are doing does, in fact, qualify to be called a "business."