I was just laid off and I want to be a shopper to add to help with my unemployment benefits. Will payment get reported and will this affect unemployment?

You need to keep track of ALL of your income.

You are expected to pay taxes on *all* of the income you receive from shopping. This includes that single $7.00 shop you did for one mystery shopping company.

Unemployment benefits rules are state-by-state, so check with the place where you apply for benefits about how they would treat small sums of income from "intermittant" self-employment as an IC.



Edited 1 time(s). Last edit at 04/25/2012 03:49PM by walesmaven.

You only have to report income on your tax return for companies that pay out $600 or more in a year for shops you have completed. I reported my income from selling at a swapmeet, after the money I shelled out to get into the lot, I made $2 for that particular day. They sent me a new form saying the information I reported needed to be corrected. would $12 for 6 hours of my time make that much of a difference? Not really. I just sent it back without reporting the income on my unemployment slip. Personally I wouldn't. The fees are too minimal for most shops, the expenses can easily outweigh the income.

Sferro -

The $600 is ONLY for the issuance of a 1099-MISC.

IF you earn more than $600 per year, a company (any company) is *required* to issue a 1099 for that sub-contractor/recipient of funds.

[answers.yahoo.com]

[www.forbes.com]

[www.irs.gov]

Self-Employment Income

It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.

All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.

Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income.

Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer.

Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs.



Edited 2 time(s). Last edit at 04/25/2012 05:24PM by r@inyDayZ3.

Walesmaven is spot on--the rules vary state to state. In some states you can earn some money from occasional and intermittent employment and not have it change your unemployment amount. In some states what you earn reduces the current check but does not change future checks. A bigger issue is that all states I know of require that you are 'available and actively looking for employment'. On a state by state basis the definition of that will vary, but it could be interpreted that if you have made a commitment to be at a particular place at a particular time to do a shop you are not 'available' for regular employment.

In my state I would tend to claim net income received. So lets say I received $100 this week for work done last month while I was still employed, I would mention it to Unemployment and that it was payment for work prior to my Unemployment claim date. There should be no change to my Unemployment. Lets say, however, that I received $100 for work done since I filed for Unemployment. Lets also say that $14 of that was reimbursements and I drove 100 miles to do the work. I could readily show that my 'earnings' were $100 - $14 - $55.50 = $30.5 'profit' from mystery shopping (because my deductible mileage rate is 55.5 cents per mile). As of a few years ago I believe you could earn $100 per week without reduction in your check, but times and places change so you need to check with your local Unemploymet folks about what needs to be claimed and what doesn't need claiming.

That is what I would have done with MY state's requirements AT THAT TIME. But I would not start to suggest that you do that NOW with YOUR state without talking with your Unemployment folks about what YOUR eligibility parameters are.

Mystery shopping companies do not report your income on a contemporaneous basis, but you are required with your tax return to claim every penny earned either on a Schedule C for your business or as 'hobby income'. Generally only if you are filing a Schedule C do you get the tax benefits such as mileage deductions. It is not necessary for a company to send you a 1099 unless you have earned more than $600 but that does not mean they don't claim what they have paid you on their own tax returns as one of their business expenses.

Flash Wrote:
-------------------------------------------------------
> Walesmaven is spot on--the rules vary state to
> state. In some states you can earn some money
> from occasional and intermittent employment and
> not have it change your unemployment amount. In
> some states what you earn reduces the current
> check but does not change future checks. A bigger
> issue is that all states I know of require that
> you are 'available and actively looking for
> employment'. On a state by state basis the
> definition of that will vary, but it could be
> interpreted that if you have made a commitment to
> be at a particular place at a particular time to
> do a shop you are not 'available' for regular
> employment.
>
> In my state I would tend to claim net income
> received. So lets say I received $100 this week
> for work done last month while I was still
> employed, I would mention it to Unemployment and
> that it was payment for work prior to my
> Unemployment claim date. There should be no
> change to my Unemployment. Lets say, however,
> that I received $100 for work done since I filed
> for Unemployment. Lets also say that $14 of that
> was reimbursements and I drove 100 miles to do the
> work. I could readily show that my 'earnings'
> were $100 - $14 - $55.50 = $30.5 'profit' from
> mystery shopping (because my deductible mileage
> rate is 55.5 cents per mile). As of a few years
> ago I believe you could earn $100 per week without
> reduction in your check, but times and places
> change so you need to check with your local
> Unemploymet folks about what needs to be claimed
> and what doesn't need claiming.
>
> That is what I would have done with MY state's
> requirements AT THAT TIME. But I would not start
> to suggest that you do that NOW with YOUR state
> without talking with your Unemployment folks about
> what YOUR eligibility parameters are.
>
> Mystery shopping companies do not report your
> income on a contemporaneous basis, but you are
> required with your tax return to claim every penny
> earned either on a Schedule C for your business or
> as 'hobby income'. Generally only if you are
> filing a Schedule C do you get the tax benefits
> such as mileage deductions. It is not necessary
> for a company to send you a 1099 unless you have
> earned more than $600 but that does not mean they
> don't claim what they have paid you on their own
> tax returns as one of their business expenses.

The problem is that that is not how they would necessarily calculate your income. Many government programs calculate income in a way that is completely different than how it's calculated for income tax purposes. The original poster needs to check with unemployment in their state to find out the rules for how to report it. For instance, I know one government program here expects you to declare all shopper payments as just income and your purchases as an expense. They also only allow you to allocate 18 cents/km for your gas expense. It's not done the same as income tax at all which is why you need to know the rules of the program you are under. (Now when it comes to reporting income for tax purposes at tax time each year, then that's entirely different...)

I agree - check what your state says. They want you to work. In my state I can earn $100 per week before it affects my benefits. If I make $106 in a week $6 is subtracted from my weekly benefit. That $6 is then added back to my benefits total for another week. So to answer your question - the money you earn MS must be reported but anything over the work amount is added back into your benefits but your benefits are extended till exhausted - or you find a job



Edited 1 time(s). Last edit at 04/26/2012 12:51AM by kalfini.

GREAT infor. I would start signing up for MSCs anyway, because it takes a long time to get started. I am fairly sure that you can make a certain amt of $ before it will cut in to the Unemployment.

In most states whatever amount you earn will be subtracted from your unemployment benefits paid to you but you will report the income within the time period you RECEIVE it not when you do the mystery shop. While some MSCs pay very fast, like a week or 2, many don't pay for 30-60 days, so you may not receive (and have to report) any income for a while. But do check with the unemployment office in your state to see what the law is there.

In my state the rules said if you worked for anyone OR worked for yourself for as little as a few minutes, it counted as a day's employment even if you were helping someone out and earned no money at all. It counted as a "benefit day," with 4 days making a benefit week it meant you would lose one quarter of whatever your benefit rate was that week.

As I recall when you are applying for benefits for a particular time period you are saying you were available every day to accept work or interviews. In addition to the money issue you would also have to tell them you were available every day. I have no idea how they would find you out if you fudged the answer there but you might have to sign something to the effect each period that you did not work.

sandyf Wrote:
-------------------------------------------------------
> As I recall when you are applying for benefits for
> a particular time period you are saying you were
> available every day to accept work or interviews.
> In addition to the money issue you would also have
> to tell them you were available every day. I have
> no idea how they would find you out if you fudged
> the answer there but you might have to sign
> something to the effect each period that you did
> not work.

This seems to be a misconception that many people have - that you need to be available 24/7 to interview and job hunt. Yes you need to be available but just like in the real world when you are job hunting there is usually a choice of times to interview over the phone or in person. My husband has been out of work twice and he did not sit at the phone all day every day waiting for that may be call. He was out and about (his cell was in call number) and if he got a call he was able to work with the people on when to come in for an interview. It is true that you have to declare extra work but you can do some (at least in Illinois and I forget the exact number) before it affects your UE.

Liz

In my state you declare the money earned in the week you earned not the week you get paid. But like I said they give you $100 before it starts to subtract from your benefits. But you don't lose it - it's stays in your benefit pool until exhausted or you find a job.

And traveliz is right. you can do other things - even work occasinally while claiming unemployment - as long as you still look for a full time job and report your income when you file your weekly benefits

Here there is some type of calculation used and if you make less than your benefits you are still eligible for the difference. In Missouri it also reported in the week it is "earned" not "paid."