Another tax question

Hello,

I am just started mystery shopping last year. I did not complete tons of mystery shops last year. Do I add up fees and reimbursements to see if I am over $500? If I am under $500, I do not have to include it on my taxes?

Thanks!

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Just your fees not reimbursements. Even if you are under $600 you have to declare it.

Yes, you have to declare all your income. Feel free to check the IRS home page if you like. If I'm not mistaken, reimbursements are technically included as income - but get deducted as allowable business expenses. Therefore, you are really left with income only.

Happily shopping Rhode Island and nearby Massachusetts and Connecticut

I think the minimum actual income that needs to be reported is $400 (as self employment tax) but don't quote me on that. (this is only if you had no other income--for example you are married and file separately--so the only income on your return is mystery shopping)

Also, both state and federal have a minimum income that needs to be reported for the actual income tax portion...

if you use Turbo Tax online....it will tell you if you owe....you don't have to actual use Turbo Tax to submit your taxes...just as a check on what you owe and what it should come out to...

I used another company---well tried to--a few years ago....a lot of people had trouble with them and the software not working.

I have heard if people just reporting income and ignoring reimbursements....and listing total amount paid including reimbursement and cash....and then deducting the reimbursments as expenses..

either way the reimbursements are not taxed..

Edited 1 time(s). Last edit at 02/14/2015 04:49AM by jmitw.

Report everything. If you owe no tax, the form/program will tell you so.

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.

Stop stressing over what you're supposed to report and report everything. One way that works is to add up all fees and reimbursements received and report that as gross income. Subtract all required purchases as an expense. Keep up with your own income and don't depend on 1099's. Sometimes you get them, sometimes you don't. Sometimes they include reimbursements, sometimes they don't. The 1099's issued by the MSCs are essentially useless because they're not uniform. You can't depend on them (depend on that).

Download or order the IRS publication on operating a small business. Read it for yourself so you understand the process of record keeping and preparing a Schedule C. You need a grip on what's happening even if you use tax software or a professional tax person.

Mary Davis Nowell. Based close to Fort Worth. Shopping Interstate 20 east and west, Interstate 35 north and south.

@jmitw wrote:

I think the minimum actual income that needs to be reported is $400 (as self employment tax) but don't quote me on that.

Please, if you don't know what you're talking about sufficiently to be quoted on it, don't give tax advice here!!! That is completely incorrect. $400 is the level under which they will not assess the self employment tax, it has nothing to do with whether the income is reportable or not. ALL income is reportable. And you CAN quote me on that.

Time to build a bigger bridge.

Thanks everyone, very informational!

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