Question 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.
According to IRS Publication 463:
Travel in the United States
The following discussion applies to travel in the United States. For this purpose, the United States includes the 50 states and the District of Columbia. The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States.
Trip Primarily for Business
You can deduct all of your travel expenses if your trip was entirely business related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination.
You work in Atlanta and take a business trip to New Orleans. On your way home, you stop in Mobile to visit your parents. You spend $1,070 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $920. You can deduct $920 for your trip, including the cost of round-trip transportation to and from New Orleans. The deduction for your meals is subject to the 50% limit on meals mentioned earlier.
Trip Primarily for Personal Reasons
If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. However, you can deduct any expenses you have while at your destination that are directly related to your business.
A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip.
My reading of this is that squeezing in a few mystery shops on your vacation does not make your vacation tax deductible. (You expected another answer? Sorry.) However, you could be reimbursed for some of your expenses as part of the mystery shopper jobs, and some or all of those reimbursements would likely be deductible as reasonable and necessary business expenses.
You can read more about this in IRS Publication 463.
I do a mystery shop at a golf course. It’s an all-day assignment and I had to drive over 300 miles to do the shop. I stayed over that night at a hotel. Can I deduct the hotel costs?
Cathy Stucker says
I am not a tax professional, so you should ask your tax preparer. However, my interpretation of the tax code is that if the primary purpose of the trip is business, your travel expenses would be deductible. You might want to review the IRS publication on business travel expenses.