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 Mystery Shopping, Merchandising & Demo
 Independent Contractor Taxes
 Write offs for Tax Purposes as an Employee
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DonnaShopsSC
Contributor

Columbia, MO
USA
50 Posts

Posted - 02/21/2008 :  11:12:04 AM  Reply  Reply with Quote
Can you think of write offs you can take on your tax return as an employee of a merchandising company?

I was thinking I could write off the mileage they do not pay me and also the difference in what they pay me vs. what the IRS states as rate per mile. Can I write off part of my home office since this is where I get all my jobs, information and printing done?

What have you written off as an employee?

Donna
Merchandising/Shopping in Columbia, Missouri

LaurelG
Member

Lawrenceville, GA
USA
33 Posts

Posted - 02/21/2008 :  12:40:03 PM  Reply  Reply with Quote
I write off the portion of my mileage that my company doesn't cover. My company pays 10 cents under what the IRS allows.

The home office thing is really hard to write off. You have to have a room in your house that is only used for work and nothing else. When I first started merchandising I wanted to write off the space I use to store the product, but after answering all the questions on my tax software about home office it said I didn't qualify.

On the other hand, I did write off part of my cell phone and part of my internet connection. I am required to have both for my job, but I also use them for personal use so I couldn't take the whole amount.

Laurel Grams
Mystery Shopper for Northeast Atlanta suburbs
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JudyK
Star Contributor

Eau Claire, WI. 54703-1729
USA
1349 Posts

Posted - 02/21/2008 :  1:40:06 PM  Send JudyK an AOL message  Reply  Reply with Quote
I write off a separate room devoted to my work. Also, ALL printer ink/paper and fax ribbons, because the company I work for has a lot of monthly paperwork that I have to print out.Anything you purchase for use on the job or in that office is deductible as long as you arent reimbursed for it, IF you have that room devoted for use as an office, you also can deduct a portion of your heating and electric bill. At years end you need to know the exact cost of each utility, plus, the square footage of your home and the size of the room you're using. You can even deduct the computer, printer and fax machine,and internet service if it is used mainly for work. Dial up service for some reason isnt acceptable for a deduction as the service is so slow and few people that use the computer for work purposes cant tolerate the slowness of downloads/uploading. If you can set aside a room, it is in your best interest to do so. Then too, if you have the room, then even those storage shelves you bought for extra storage are deductible, plus, filing cabinets.
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A2Kelley
Trainee

Martinsburg, WV
USA
8 Posts

Posted - 12/20/2010 :  2:52:33 PM  Reply  Reply with Quote
This is my first year as a merchandiser and while I am an employee of several companies, I have no other job.

I see there's lots of information posted here on Volition about deductible expenses as an independent contractor, and a little guesswork here about as an employee, but I'm looking for more up-to-date info.

While I use my desk and bookcase next to it mostly for work, I'm not sure I can claim it as a home office, because it is not 100% exclusive. However, that is the only place I receive and schedule my work.

I have been keeping track of daily totals for mileage and business-related cell phone use (mine charges me 10-cents/minute). I also have receipts for ink and paper, as well as long-distance calls/faxes sent on my landline phone.

I (and I'm sure others) would appreciate any advice given.

Thanks!


Amy
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KentB
Member

Cordova, TN
USA
32 Posts

Posted - 12/21/2010 :  6:39:33 PM  Reply  Reply with Quote
In order to deduct Employee Business Expenses (see IRS topic 514 for details at http://www.irs.gov/taxtopics/tc514.html ) you must use Schedule A, itemized deductions, and form 2106 (Employee Business Expenses). Only the expenses that exceed 2% of your adjusted gross income are deductible. These expenses are deducted as a miscellaneous itemized deduction on Schedule A.

If you own a home and have a mortgage, or have large charitable contributions or medical expenses and ususally itemize deductions, then this may work out for you. If not, it may not work unless you do a lot of business miles (the rate for 2010 is 50 cents per mile) and are not reimbursed. If you do get reimbursed for some or all of your mileage, you deduct that amount from your calculated mileage deduction.

The tricky one is the car mileage deduction. All mileage driven for business purposes is deductible. Commuting distance is not deductible. IRS Publication 463 says "You cannot deduct the cost ... of driving a car between your home and your main or regular place of work." Like you, my home is where I file reports, accept assignments, and plot a map for my day's visits. I do not follow a regular route, every day is different. So, my opinion is that since my home is my regular place of business, my travel from home to each location I am visiting, and then to come home is a business expense. Not everyone agrees. One of my employers does not agree and does not reimburse mileage to my first (and from the last) location unless it exceeds 30 miles.

If you have an assignment that requires you to stay overnight out of town, then you can also deduct the motel and meals. I use the per diem rate that the government defines for all major cities. Then you don't need all those receipts from McDonalds.

Keep good records to document your cell phone use for business, as the business portion is deductible also.

I don't bother with the Home Office deduction, since the amount is not that large unless you have a large home office.

The good news is that as an employee, you do not need to pay the Self Employment Tax (Social Security and Medicare) that independent contractors need to (if they have a net profit).

Kent Burghard, Senior Tax Advisor and Merchandiser
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KentB
Member

Cordova, TN
USA
32 Posts

Posted - 12/24/2010 :  05:39:58 AM  Reply  Reply with Quote
I deduct the complete cost of computer equipment (and box cutters, etc) the year I purchase them using the 179 option for deprecistion.
Otherwise, I agree that the depreciation is not really worth the trouble (unless you get a top of the line machine) since you have to spread the cost over 5 years.

Your spreadsheet should show the stores you visit and the cities where they are located for each day you travel. I have not been involved in any audits, so I am not sure about the need for the odomoter reading. Using 12000 miles per year is fine for your return, but if you are audited it may not fly with the auditor. Print a copy of the spreadsheet and put it with a copy of your return for your records.

Be as accurate as you can, and don't make things up. I read about an audit where the taxpayers were claiming business travel on a holiday when the store was closed, and the IRS auditor caught it.

KentB, Senior Tax Advisor and Merchandiser
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Ms.Baker
Valued Contributor

Evansville, IN
USA
135 Posts

Posted - 02/18/2011 :  8:12:59 PM  Visit Ms.Baker's Homepage  Reply  Reply with Quote
Hi there,

I just wanted to point out that the reason you can deduct mileage as a shopper or merchandiser is because you work from home, and therefore, have a home office. If you are shopping while driving for your company, those miles are not deductible as an expense because the purpose of your trip is to work for your company, not to shop for a mystery shopping company.

It's best to have two computers, two printers, and two cell phones, then there is no question that one is for your personal use and the other is for your business. The computer is depreciated over five years, but a printer can be written off in one year.


Shopping the Tri-State area
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MaryRod
Star Contributor

El Centro, CA
USA
542 Posts

Posted - 04/17/2011 :  09:28:23 AM  Reply  Reply with Quote
Not sure what about you, but as employee and IC, I've worked as merchandiser, mystery shopper, demonstrator, auditor any thing else I may get a call for...all in the same year. I've read in the IRS somewhere, that If I went to buy stamps and I bought something for my personnal use/home I can claim the mileage expense since I did go/did get the stamps.

As I have just read we can also claim the expenses for mileage as an employee, not just IC or home office. We don't have to have the office. When I started I had no computer, no printer, no faxer, nothing, just a phone, not even mine. I went where I needed to go when I needed to use the office equipment. I was able to claim the mileage since I did have a car. All you need for mileage is a car.

I also read the you do not need a full room to have an office, it could be a small space or a counter. Like me I use 1/4 space of my room for my office, all I pay rent for is a room. I could use it cut 1/4 of my expenses. Is it worth the trouble, or is it no trouble at all?

As a employee you can claim mileage expense from one work place to another even if they're different employers. Using your auto, bus, taxi or what ever..

Commuting going from home to another work location that is YOUR OFFICE (office away from home) This you cannot claim.
You may have an office at home and another at another REAL office in town. Which is driving from home to your work place, this you cannot claim.


~~ Please consider the environment before printing unnecessary pages.~~
~*~Mary~*~
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