You should have received all of your 1099s from mystery shopping companies but remember that (1) you can file your return without any 1099s as you are not required to send 1099s with your tax return and (2) even if you don’t get a 1099 you still must report your income.
Companies are only required to send a 1099 when they pay you $600 or more during a year. However, any income you earn as a mystery shopper should be reported. Failing to report income is the biggest no-no on the IRS’s list of sins. Of course, you can and should only pay the amount of tax you owe, not any more, so take every legitimate deduction you can.
Your mystery shopping income and expenses are reported on Schedule C of your tax return. You can learn more about Schedule C and what you can deduct at the IRS website: http://irs.gov
The standard mileage rate for 2010 was $.50 per mile. You can learn more about deducting car and travel expenses in Publication 463: http://www.irs.gov/publications/p463/index.html
Did you owe money this year? You may be subject to an underpayment penalty if you owe more than $1000 when you file your tax return. Employees have tax withheld from every paycheck and pay their taxes through the year in that way. As independent contractors, we are not subject to withholding, but there are two ways to pay income taxes over the course of the year so we are not faced with the double whammy of owing a bunch of taxes AND having to pay a penalty. If you or your spouse have a job where your pay is subject to withholding, you can increase the amount of tax taken from each check. Talk to your human resources department about how to do this. The other way to avoid a penalty is to pay quarterly estimated taxes. The first quarterly payment for 2011 is due on April 12, 2011. For more information on quarterly estimated taxes, see http://www.irs.gov/pub/irs-pdf/f1040es.pdf (PDF)