1099 Forms for Mystery Shoppers

tax-formsTax time is here again. You may have already received 1099 forms from some of the mystery shopping companies for which you worked in 2008. Here are some frequently asked questions about 1099s and what you will need to know to file your income tax return.

Will I get a 1099 from every mystery shopping company I did work for in 2008?
You will not necessarily receive a 1099 from every company for which you mystery shopped. Companies are required to provide a 1099 if they paid you at least $600 over the course of the year. Some companies include all payments they made to you when calculating the $600 threshold, and others exclude amounts paid for reimbursements and other expenses.

There were several mystery shopping companies that paid me less than $600 each during the year. Do I have to pay taxes on that money? How do I account for it without a 1099 form?
You are required to report all of your income. You will take deductions for reasonable and necessary business expenses, and pay income and self-employment taxes on your profits.

You must report income, even if you do not receive 1099 forms from some companies. You should have records of your income and expenses for the year, so you can rely on those records when calculating the amount of tax you owe.

When are companies required to send out 1099 forms?
The due date for providing 1099 forms is January 31st. That does not mean that you will receive all 1099 forms by that date. It does mean that the forms must be properly addressed and mailed no later than that date, except that when the due date is on a weekend or holiday, the due date is the next business day.

In 2009, January 31st falls on a Saturday. That means that 1099 forms must be properly addressed and mailed by Monday, February 2, 2009.

What if a secret shopping company paid me more than $600, but I do not receive a 1099 form?
Be sure to allow time for the form to reach you by mail. If you have not received an expected 1099 by mid-February, you should contact the mystery shopping company and ask if a 1099 form was mailed to you.

Whether or not the company provides a 1099 form, you are required to declare the income and pay any tax owed. You can file your tax return without the 1099, as you are not required to include the 1099 with your tax return. Refer to your accounting records to determine the amount of income you must declare.

The 1099 form I received included amounts for reimbursements of required purchases and even some travel expenses the mystery shopping company paid me for. How do I account for that?
You may want to address this with your tax professional, but it is important that you show all of the moneys reported on 1099 forms on your tax return. Amounts you received as expense reimbursements should be deductible as business expenses. That means that you include them in your gross income, then deduct the expenses and pay taxes on the net income.

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Comments

  1. What IRS code do you use for tax purposes?

    • Cathy Stucker says:

      I don’t know the number off the top of my head, but “Consulting” is a good generic category for mystery shoppers.

  2. I am usually a dependent on my mother’s taxes. Do I have to file my own now or is there a way to still put it on my mother’s?

  3. So If I don’t make $600, I don’t have to file/report it?

    • I am not sure what the law is about reporting if your total income is less than $600 for the year. Check with the IRS.

      If you are required to file a tax return and report your income, that means ALL of your income. If a particular company paid you less than $600 in a year, they are not required to send a 1099, but you are still required to report that income along with any other income you had for the year.

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