Mystery Shopper's Manual

1099 Forms for Mystery Shoppers

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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.Continue Reading

Estimated Taxes are Due for the Fourth Quarter of 2008

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tax_reminderIf you pay quarterly estimated income taxes, remember that your fourth-quarter estimated tax payment (using form 1040-ES) for 2008 is due on January15, 2009. You may delay making this payment until Jan. 31 if you file your 2008 return (Form 1040) and pay any tax due by February 2, 2009.

Not sure if you have to pay? You can figure it out by consulting the IRS web site at http://www.irs.gov/publications/p505/ch02.html

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May I Deduct My Vacation Costs if I Mystery Shop on the Trip?

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taxes.jpgQuestion from a mystery shopper:

You recently wrote about doing mystery shopper jobs while traveling on vacation. I think that might be a good way to make my trips more affordable, and I also had this thought:

If I mystery shop on my vacation, may I deduct the cost of my trip from my taxes?

I am not a CPA or tax professional, so this should not be considered legal or professional advice. In fact, the best thing to do is to consult with your tax professional to get his or her opinion. However, here are some portions of the tax code that seem to apply to this question.

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What is an Independent Contractor?

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businesswoman.jpgThe following is provided as general information about Independent Contractors. It is not legal advice. If you require legal advice, you are encouraged to consult an attorney knowledgeable in this aspect of the law.

As secret shoppers, we typically work as Independent Contractors (ICs), not employees.

There is not a single factor or test that determines whether a worker is an employee or an IC. Saying that someone is an Independent Contractor does not necessarily make it so. There are several things that regulatory agencies, such as the Internal Revenue Service and state tax departments, consider when determining is someone is an employee or an IC. The rules are often vague, and interpretation is up to the agency making the determination.

The IC relationship is spelled out in the Independent Contractor Agreements (ICA) between mystery shoppers and mystery shopping companies. These agreements define the rights and responsibilities of both parties. ICAs often include language relating to the factors regulatory agencies consider when determining if someone is an employee or an IC.

So what does it mean to be an Independent Contractor?

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It’s Not How Much You Make, It’s How Much You Keep

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accountant.jpgMaking more money is nice, whether you do it through getting more mystery shopper jobs or higher-paying assignments. However, it is possible to be more profitable without earning any more money.

How? Well, as a CPA friend of mine says, “It’s not how much you make, it’s how much you keep.” Here are some suggestions to help you keep more of what you make as a secret shopper.

Maximize tax deductions. You can deduct reasonable and necessary expenses incurred in the process of running your business. These may include:

  • Computer and Internet expenses;
  • Office supplies (including paper, ink, toner, etc.);
  • Cell phone service;
  • Mileage or automobile expenses;
  • Training and education;
  • Voice recorders, digital cameras and other technology;
  • Batteries and supplies for technology;
  • A home office; and
  • Other costs.

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Mystery Shoppers and EINs

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EIN stands for Employer Identification Number. You might think of it as the equivalent of a Social Security Number for businesses. Mystery shoppers are not required to obtain EINs, however, many choose to do so. With all the concerns about online privacy and identity theft, mystery shoppers are more likely than ever to want to protect their Social Security Numbers. Having an EIN is one way to do that. Here is what you need to know about what an EIN is, why you might want one, and how to go about getting one. (It’s faster and easier than you may think.)Continue Reading

Investing in Your Secret Shopping Business

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fortune_cookie1.jpgAs a secret shopper, you are an independent contractor. That makes you a small business. Investing in your business can make you more profitable in the long run. A great businessman like Andy Defrancesco might be of great help if you want your business to excel positivity to gain more customers.

The U.S. Treasury has started depositing and mailing stimulus payments to taxpayers. When you receive yours, why not use some of the money to make your mystery shopping business more profitable? That can mean investing in yourself, or in equipment to save time and qualify you for more shops.

Here are some examples of ways you could invest a small portion of your stimulus payment to earn more as a mystery shopper. Investing in the stock market provides many benefits to individual investors. You won’t find a better resource on the internet like https://www.stocktrades.ca/best-canadian-dividend-stocks/.Continue Reading

April Tax Deadlines and the Stimulus Payment

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1040-form.jpgNext week there are two important tax deadlines: April 15th is the deadline for filing your annual Federal income tax return. And, if you pay quarterly estimated income taxes, remember that your first-quarter estimated tax payment (using form 1040-ES) for 2008 is also due on April 15, 2008.

If you can not file your annual return by April 15th, you may file for an extension, but there is a good reason not to do that this year.Continue Reading

Tax Tips for Secret Shoppers

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It is that time of year again. Time to pull together all of the records of what we did last year so we can file our tax returns. Here are some tips to help you save time and money when paying your income taxes.Continue Reading