Today TaxMama hears from Brad in Missouri, in the TaxQuips Forum. Brad tells us “ I’m an independent contractor for several mystery shopping companies. Today for example I did a casino shop. I get reimbursed for 1 meal expense up to $10 and paid $35 for the shop itself, but they legally can’t reimburse my test purchases at gambling to blend in that’s required for the job.” He has a lot of questions about being a mystery shopper . Let’s see if we can help him.
Do you mean to tell me that you’re really working as a for-real mystery shopper? It’s not all just spam?
Actually, when I used to work in the movie theater, rumors would always fly when we were expecting mystery shoppers. I don’t know how, but someone would always know when they were coming around. Then, we could usually spot the shopper. (Or so w thought… )
Let’s see if I can answer your questions in order, OK?
1) Where do I put reimbursed meal expenses on the tax form?
On the first line of Schedule C, as part of your total income. You deposit it – you report it!
However, when you deduct those reimbursed expenses, put the meals on one of the blank lines on your Schedule C – where the “Other Expenses” are. Call them “Reimbursed Meals” unless your software lets you enter meals as 100% deductible.
2) What about tips and when I go over?
Enter 100% of those expenses on the regular line for meals – they are only 50% deductible.
3) I typically limit myself to $10-20 in gambling expenses required for the job that aren’t reimbursed. How do I document these cash expenses and where do I deduct them? (I never win btw)
Deduct them on one of the blank lines on your Schedule C – where the “Other Expenses” are. Call them “Product Testing Costs”. Keep detailed logs of these expenses.
4) Of course I deduct the mileage to/from. Anything else you can think of that I can deduct other than the typical home office stuff?
Goodness, that’s a big, open subject. We could sit down and talk about your business for hours. In fact, I’ve written two books that address those topics. Ever heard of them?
The paperback, Small Business Taxes Made Easy (with a new edition coming out in December) and the e-book, The 100% Home-Based Business Tax Solution. Consider reading one of them. Actually, as a Family Member, you can find The 100% Home-Based Business Tax Solution in the Family Member Resource section, for free.
Or, of course, you could always just go to the IRS website and read Publication 334. It has lists of deductions, too.
It does sound like a fun job.
And remember, you can find answers to all kinds of questions about mystery shoppers and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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