Tax Questions

Hi! I have a CPA. She is great, but not in the know of all the ins and outs of mystery shopping. I don't even fully understand some of the intricacies. I have done several Presto Insta Shops and received a 1099. I just noticed that many of those were actually with Ipsos or Intellishop. I received a 1099 from Ipsos. Is that income recorded on both of those 1099's. How do I figure this out? And when I am recording my income from Intellishop, which was less than $600, do I just not include the ones that would have been reported on the Presto 1099?

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I am not sure as I have not looked at any of my 1099's as of yet, and I honestly don't rely on them. I would suggest, you start keeping a spreadsheet on your own to track your payments so you know what is a payment, what is a reimbursement, etc. Your 1099's will include money that was reimbursed to you for things purchased (if you did shops like that). If you did not track shops like that, you are going to have to go back and break it apart. If the IRS ever came to you and asked to explain why there is a difference from the 1099 and your reported income, how do you plan on explaining the difference? You must keep records of your own, at minimum, the MSC, the shop you did, the fee paid and the reimbursement amount.

There are many threads on taxes in this forum, you can do a search for tax and you may find the answer you need.
Thanks. I do keep records, but I also need to submit these 1099's. I am asking this question to help explain the difference. I am confused about how the companies are structured, and what is reported where. I have not found this question asked when I have done a search.
Any good CPA should know how to do this. It does not matter that it is mystery shopping. I do understand that if you did not keep good, accurate records, then it makes it more difficult.

IPSOS and Intellishop 1099s do not include the amounts that were paid to you though Presto. IPSOS will send you a 1099-NEC for both their Shopmetrics and Sassie platforms, but those 1099-NECs don't include what is reported on your 1099-NEC on Presto. The same with Intellishop.

Notably, the Presto 1099-NEC includes any reimbursements you may have received. You'll report the full amount of the Presto 1099-NEC, then deduct the reimbursed expenses in Part V (Other Expenses) of Schedule C. If you receive payment from Presto through PayPal, you'll need to consider that as well. Again, you'll report the full amount of the PayPal 1099-K, then deduct the full amount Presto paid you on a separate line in Part V of Schedule C.

I realize it can be complicated without good records, and you'll need to go back and recreate records now before you file. If the IRS ever decides to audit you, having records will give you evidence to help fight back. The main thing to keep in mind is to report all of your income, even if you didn't get a 1099. Since the IRS has no way to know what part of your income are fees and what part are reimbursements, you'll deduct the reimbursements out in Part V of Schedule C. You can label the line something like, "Reimbursements included on 1099s." Just something brief to let the IRS know what that deduction is. If you have duplicate income reported, for example, IPSOS income from the Sassie platform will come on their 1099-NEC and PayPal's 1099-K, then you will deduct out the duplicate income in Part V of Schedule C as well. Again, you can label the line something like, "Duplicate income reported on PayPal 1099-K."

Once you follow the process for each MSC, then you'll end up with a net income, which is what you are taxed on. Keep in mind, if you have other miscellaneous expenses that aren't separated out already in Part II of Schedule C, then you can add those on a line of Part V as well. For example, if you are like me and bought a new computer to run your business, you may be able to expense the full amount in Part V by taking de minimis safe harbor election. You or your CPA will need to see if you're eligible or if you will have to deprecate the larger capital expenses.

A couple of other notes, Part V of Schedule C is also where you deduct your loss for shops that were rejected by the MSC. Just have the e-mail(s) or other records to show the report was rejected. If you have non-reimbursed and reasonable expenses, you can deduct those on Part V of Schedule C as well. For example, I used to do hundreds of gas station audits in a year. It was often hard to find something that cost less than the reimbursed amount, so my total might be $1.10 in the c-store, but the MSC only reimbursed $1.00. Well, I could take that ten cents deduction as a loss because the purchase was required in order to do the job, the ten cents was not reimbursed, and the amount was reasonable so as not to raise any questions. Last year I had $166 of non-reimbursed expenses.

Regardless of what others will tell you, meals you buy while out on a shopping route are not legally expendable unless you stopped overnight (e.g. multi-day route without going back home) or you had to stop for substantial sleep or rest to properly perform the work on your route. Words like "substantial" are not defined by the IRS and this is why records are handy as you can keep track of when you left home, your time along the route, and when you returned home. In theory you could be gone on a route for 18-hours and working that whole time, and it might be reasonable if you pull over at a rest area and nap for a couple of hours.
I haven't looked, as well. But I believe any shops completed via Presto, and earnings as a result, would be reported on the 1099 issued by Presto, not the individual MSC. Ideally, the earnings from these Presto shops shouldn't be reported again on the 1099 issued by the respective MSC.

Also, there's the potential matter if reimbursements are also included in reported earnings.

You'll have to go through the shop records to sort out. It might not be as easy as providing the 1099s to the tax preparer, to input. You may have to further explain to the tax preparer any differences. You might have to provide records/reports, along with the 1099s, so that the tax preparer knows what and how to report on the tax return

One way to think about it, is having to provide financial records to your tax preparer, for a business return. The better handle you have on your business's financial records/reports and know your business, along with a capable tax preparer, will sort out any potential issues.

Hopefully, this helps and is not confusing.

Anticipating an answer from ServiceAward in 3, 2, 1 ...
This is very helpful. I think it would help if I understood what exactly the shops on Presto are, and why some shops from, say ipsos or confero, are done through that and others through their website. Do you understand the difference?
On Presto, under "My Completed Shops", for each shop record, I don't think it states the MSC. Also, it only states the total payment amount. When I enter the shop reports on Presto, I do them on my computer. I save the report and receipts to my computer. Unfortunately, if any of your shops had a reimbursement, you'll have to rely on your records to arrive at net earnings.

On the MSC's Sassie website, there should still be a shop record for a shop completed via Presto. It'll have a zero payment though.

I think Presto is just an additional app to facilitate shops from participating MSCs that use the Sassie platform.

This is too much work!

Edited to add: I'm not sure why MSCs choose for certain shops to be done/completed via Presto.

Edited 1 time(s). Last edit at 02/20/2025 10:35PM by Okie.
Completed Presto shops from an MSC using Presto's platform, get paid by Presto. The MSC's have paid the cost of the fees and reimbursements for their shops in advance to Presto. Presto, in turn, pays the IC directly, via PayPal. So, those shops from Presto are what would be listed on Presto's 1099-NEC. And it would be a total of any and all MSC's that had their shops available via Presto. The MSC's will not re-list those with their 1099-NEC's.

The MSC's will provide a 1099-NEC for the shops you did through their own platform(s). But, some of the companies lump fees and reimbursements together on the 1099-NEC they issue and some do not. That is where your records come in. Your records should have the totals you earned as fees and the totals you earned as reimbursements, hopefully, categorized by each company, for clarity and good bookkeeping. So, if, for example, you earned $8,000 in fees, along with $1,000 in reimbursements from one of the MSC's, and you received a 1099-NEC that listed your earnings as $8,000, then you know that 1099-NEC is correct and you do not need to make adjustments on your tax return, for that one. If the 1099-NEC showed your income as $9,000, you know they included the reimbursements and fees together and you will have to make the adjustment on your return.

If you made a small amount with a company that paid you via PayPal, the 1099-K issued by PayPal will list everything you got paid from all companies and it includes the total of fees and reimbursements lumped together. You may not have received a 1099-NEC for the small amount that 1099-K had included. Think of the 1099-K from PayPal as a reference for all monies paid to you via PayPal from any company, no matter how small. The IRS will get that 1099-K information. And if you only include the 1099-NEC's you received on your return, the IRS will see the discrepancy. Your return should show all income. Whether paid via PayPal, check, direct deposit, etc. The reimbursements have their place on your return as well.
Thank you! I see exactly what you’re talking about. Some of my payments ipsos show up at zero pay because they were paid through Presto. I even have some on Presto that say this payment was not handled by Presto. So I really appreciate the clarification!!
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