Mystery Shopping and taxes....

[MissyDVC]

I am just starting in Mystery Shopping(actually have my first shop today thanks to a great DISer ) and I was wondering what everyone does about taxes. I am not sure how to go about it. I am not looking to make alot of money doing it but money to, of course, put towards our Disney Trips. But it seems like, if you take out your own taxes, etc., you are not left with much. If you would rather answer in a PM, that would be fine. Thanks so much and have a magical day.

 

[Benducci]

I print out the page that shows what I made for the year & my accountant puts it on my taxes. I have only made a couple of hundred dollars but I want it accounted for.

 

[MickeyP]

If you don't mind answering, what are you getting paid? From my understanding, it's about 12.00-18.00. If you are making a substantial amt., then yes you have to pay, which wouldn't be much cuz you don't make too much.If you tried it, hated it, I don't know what you would do say fo 40.00.

 

[Jennifer S]

I have a question for the OP. DO they give you money to shop with? DO you actually buy stuff you need? I'm not sure how it works. Just curious. Do they pay per shop or by the hour? Sounds like it would be kind of fun.

 

[Benducci]

So far I have done supermarkets and banks. I go in, do what I need to do & report on it. I then get a check. The amount depends upon what I am doing. For the supermarket, they give me $5 towards reimbursement of items I have purchased & pay me $10 for doing the shop. For the bank it depends upon who I am evaluating. I get paid anywhere from $4 to $12. Since the amounts are so small, I don't think I need to pay taxes on a quarterly basis. My accountant didn't tell me to. As I said I have only made a couple of hundred dollars, not even enough to trigger a 1099 which is for amounts over $600.

 

[cinamin27]

I am not a tax expert, so this is not professional advise:
yes you would need to pay taxes on the amount they pay you to do the shop. I believe you would not need to pay taxes on the out of pocket expenses you are reimbursed for (i.e. your small purchase or the price of your meal that you are reimbursed for). You would need to keep track of your pay amounts on your own (keep all paystubs/checkstubs you receive from the companies you contract with). You will not receive a tax form unless you make over $600 for the year.

Keep in mind, you may be able to use your home office expenses as tax write offs, computer, internet service, etc. as well as possibly gas mileage. As a mystery shopper, you are an independent contractor, you would be eligible for tax writeoffs just as if you were a home business.

Again, not a tax expert, if I am wrong on any of the above, please correct me

 

[MissyDVC]

If you don't mind answering, what are you getting paid? From my understanding, it's about 12.00-18.00. If you are making a substantial amt., then yes you have to pay, which wouldn't be much cuz you don't make too much.If you tried it, hated it, I don't know what you would do say fo 40.00.

I am not sure what you are saying. Yes, the shops offer a small amount per shop, say $7-$15 and reimbursement for whatever so have to purchase. But my question is how does one make any money doing this when you make a small amount per shop and take out your own taxes? I am happy to be doing this and like I said, I just want to add some money for our Disney Trips but it seems like alot of work if you only get to keep a few dollars per shop. thanks.

 

[cinamin27]

it seems like alot of work if you only get to keep a few dollars per shop. thanks.

several years ago, I mystery shopped several times a week. Yes, it felt as if it was alot of work for very little pay. I never took the shops that you had to go in make a purchase, wait alittle bit & go back in to do a return & evaluate both experiences. The ones I see for that pay a WHOPPING 8 bux!

Now I strictly merchandise (very little) or do trailer checks (at movie theaters, I do this way more often than merchandising), still the same low pay however, IMHO, way easier, not as much "after the job" reporting & not all kinds of memorizing names, descriptions, exact times, etc.

Check out volition.com & sign up with as many merchandising companies you can, take a couple jobs & see if you like merchandising or mystery shopping better. Merchandising you will feel that you are getting slightly more $ as alot of the mystery shopping pay is in "reimbursed" fees.

 

[seashoreCM]

The amount the outfit or "employer" sends you for your stint is taxable. From that you deduct the cost of items they told you to buy (and gave away because you don't use that brand), cost of tickets for movies the purpose of which was reviewing or that you did not like and walked out on, and mileage equal to home to store and back (even if you did other things as part of the same overall trip). Use the schedule C. There are no floors or ceilings (2%, 7.5%, etc as for medical expenses or miscellaneous deductions). Sales tax, meals tax, etc. may be treated as part of the cost of the items.

Should a profit over about $400. result, as shown on the schedule C, you may have to pay social security tax. Use schedule SE. Should a loss result for the third year in a row or if you have losses more than two out of five years on average, from that point on net losses must be marked "hobby loss" (an IRS buzz word) on the schedule C and reported as zero when summarized on the front page of form 1040.

Disney hints: http://members.aol.com/ajaynejr/disney.htm

 

[Toby'sFriend]

I keep a spreadsheet for each job I do

Gross Payment (this includes the "pay" for the job plus expense reimbursements)
Miles driven to and from the job. I look it up on Yahoo maps
Cost of required purchases I made.

Then at the bottom of my spreadsheet I have all the other costs that I've spent over the year - like if you do the MPSA certification course, paper that you buy to print out copies of your report for your files, ink cartridges etc. I keep one big folder with all my receipts and jobs for the year in my desk, so I just throw the receipts in there.

At the end of the year you will get a 1099 form for each company that pays you over $600 gross.

When I go to do my taxes at the end of the year, I have all the numbers I need on my spreadsheet.


yes, you will get pretty good at looking at the jobs and determining which ones aren't worth the pay. MOST of the ones that make it out to the Volition message board are there because the Schedulers can't find people to take them. But it is an excellent place to get the names of all the Mystery Shopping companies to go apply at.

 

[Toby'sFriend]

But my question is how does one make any money doing this when you make a small amount per shop and take out your own taxes?

add: you pretty much have to learn how to group your jobs. For instance, I went out Tuesday evening and did 4 different jobs all in the same shopping area for a total pay over around $65 I think and it took me about 3 hours total. As you build up a reputation of not signing up for jobs and skipping them and then actually returning your reports in on time - the schedulers will start remembering you and offerring you jobs before they even get posted on the boards.

 

[lbgraves]

I use to MS and took jobs that we could use like dining out with the family. A $30 reimbursement covered our dinner and I was able to keep track of my timings on the kid's coloring mat so it wasn't obvious. They enjoyed going out each month to the two shops that I did and it allowed us to eat out without the cost coming out of our budget. You don't count reimbursements as income like shop fees so it didn't cost us anything either.

 

[MaMa3Princess]

Hi I have been MS for a year and we are about to enjoy the fruit of my labor with a Disney trip in 22 more days!!!

I do alot of grocery shops, bank shops, video rental shops stuff that I would normally run errands to do. I also do the dining shops to get reimbursed for eating out. The more you do and the better reputations you build the more compensation you make.

I have learned to lay low during the beginning of the month and pick up quite a bit of bonused shops.

ALso when we did our taxes this year I deducted mileage, equipment expenses and other expenses that I encountered for running my small business.

On volition there are a lot of tax tips.

At first it may seem that you are working for a little of nothing but once you really get in good with companies or group a bunch of shops together, it starts to add up. In fact so much that you can take a Disney trip

 

[DMRick]

or if you have losses more than two out of five years on average, from that point on net losses must be marked "hobby loss" (an IRS buzz word) on the schedule C and reported as zero when summarized on the front page of form 1040.
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If she has good paperwork and can show she is a business, is there any reason she just couldn't continue to take the loss against her "other" income (or husbands if they joint file)? It's taken some people many years to show a profit. The important word here is records. You need records for everything, if you show a loss past the 2 years. I realize that is more work, but some people are able to get losses for years with no problem from the IRS. I personally did. Well, it looked like a loss on paper anyway LOL! By the way, this can be a red flag, so records are very important.

Another way to keep up on your income taxes, if you or your husband (if you joint file) has extra money taken out of the "regular" job's paycheck. You'll still file a schedule C, but if you aren't talking about a lot of money, it's easier than filing quarterly. If you are already are having a lot more than you need to pay your regular taxes (some people just like to get a lot back at the end of the year), you may already be covered.
Just a comment on the person who mentioned taking home in office. It's a lot more paperwork. You have to prove you are using that percent of your home for an office, (it's easier to prove if you have inventory) and keep track of the percent you use your computer as well as the internet for this job versus home or fun use, and although I would never advise someone NOT take home in office for this reason, if they qualify, it is a another red flag, so you need to make sure your income tax is done 100% correct. You also can't take a home in office against a loss. It's only good if you are making a profit.

 

[JoiseyMom]

You need to keep track of every $ you receive, keep track of mileage, and expenses. You will then need to file a schedule C with your tax return.

It's alot of work for very little money. And yes I speak from experience. Most of the Shopping companies will only send you a 1099, when you make $600 or more. If you don't make that much, or don't receive a 1099, you still need to report all money earned.

 

[MissyDVC]

Thanks everyone for all of the information