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Mystery Shopper Taxes and Your “Real Job”

October 29, 2010 by Cathy Stucker 2 Comments

Most people are familiar with how income taxes work when you are an employee. Your employer issues paychecks to you showing your gross wages or salary, the amounts deducted for Federal Income Tax, Social Security tax, Medicare tax, and any state or local taxes. You receive the net amount of your wages less the amount withheld for taxes. Each year you file a tax return where your actual tax is calculated, and you pay any additional tax owed or get a refund if too much was withheld from your paychecks.

Mystery shopper taxes are different. Mystery shoppers are usually considered Independent Contractors (IC), not employees. That means that taxes are not withheld from the pay we receive from secret shopping companies, and we are responsible for paying the taxes on our profits directly to the Treasury Department.

So how does it work when you are both an employee and an Independent Contractor? In many ways it is the same as when you were only an employee. You file everything on one tax return and pay taxes calculated on your total income. However, like everything else in the tax code, it isn’t quite that simple.
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Do You File Estimated Taxes? Fourth Quarter 2009 Return is Due

January 12, 2010 by Cathy Stucker Leave a Comment

tax_reminderIf you pay quarterly estimated income taxes, remember that your fourth-quarter estimated tax payment (using form 1040-ES) for 2009 is due on January 15, 2010. You may delay making this payment until February 1, 2010, if you file your 2009 return (Form 1040) and pay any tax due by February 1, 2010.

Most mystery shoppers are not required to pay quarterly estimated taxes, because mystery shopping represents a small portion of their overall family income. However, if mystery shopping and other independent contractor or small business income makes up a significant part of your income, you should determine if you need to pay quarterly.

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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Quarterly Estimated Income Taxes Due

June 10, 2009 by Cathy Stucker Leave a Comment

tax_reminderIf you pay quarterly estimated income taxes, your second-quarter estimated tax payment (using form 1040-ES) for 2009 is due on June 15, 2009.  Although most mystery shoppers who accept occasional mystery shopper jobs will not have to be concerned with paying quarterly estimated taxes, if a significant portion of your income is derived from secret shopping or other independent contractor activities, you may need to file quarterly tax returns.

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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1099 Forms for Mystery Shoppers

January 26, 2009 by Cathy Stucker 6 Comments

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

January 10, 2009 by Cathy Stucker 2 Comments

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

Need to know more?Continue Reading

Mystery Shopping Companies

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