Being a mystery shopper requires organization and record-keeping, especially as tax season approaches. To get a head start, begin sifting through your receipts and records now to decrease stress later.
As Mystery Shoppers Manual stated, mystery shoppers are not employees of their scheduling companies. They are independent contractors. This means payment is issued without any tax deductions. If you make over $600 as an independent contractor, the company will send you a Form 1099. So, if you performed work for more than one company, you may receive more than one form. The Mystery Shopping Learning Center asserted that even if your earnings do not meet or exceed $600, shoppers still must report additional income to the IRS.
Any items purchased or used as part of your position as an independent contractor can be deducted from your gross income from mystery shopping companies. In addition, if items like Internet, child care, phone service or cable television were crucial components to completing mystery shopping jobs, you may deduct those expenses as well.
Did you use your car for mystery shops?
If you frequently used your car for mystery shopping gigs, you'll need to report to the IRS every detail about each trip. Mystery Shopper Magazine encourages checking old paperwork detailing the car's odometer reading at the beginning of this year. Use that number to estimate how many miles you've driven it on shops. Look back on shop routes you took to determine mileage.
For the future: Track every mystery shopping trip you take in your vehicle on a spreadsheet. You'll need to log the dates, destination, purpose and mileage when completing taxes.
Did you make out of pocket purchases?
If you had to buy items as part of a mystery shop, you were likely reimbursed for the expense in the same check at your fee for performing the gig. These out-of-pocket expenses need to be deducted from the paychecks, as they are business expenses.
For the future: Always keep receipts from any purchase made on a mystery shopping assignment. Since often these are cash transactions, a receipt will be the only evidence that it happened. Also, keep all instructions for shops sent by mystery shopping companies or the client themselves. This is additional proof of the job requirements the IRS will need to see.
The key to a successful tax season is preparation. Starting in the fall to be ready by spring is a good idea, but tracking and filing all receipts and records throughout the year is an even better one.