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 List of expenses / deductions we can claim
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.Nicole
Inactive

Burnsville, MN
USA
144 Posts

Posted - 01/14/2004 :  05:15:46 AM  Reply  Reply with Quote
Alright we first I will give you my deal. I am an idiot this year. I had my computer crash and it had to be reset and I lost all my mystery shopping files! I did think that I backed them up on disk, because a normal person would do that, but I didn't. So, I am going into tax season blind and I am upset to my stomach about it. I went and have been matching Paypal payments and check stubs to sassie accounts and companies the have a history available and I think I have everything else organized because atleast I have my filing cabinet with everything in it. Alright so here is where the topic came from: Maybe I am not thinking of a deduction that I can take so I thought maybe we could come up with a list(that won't work for everyone) but could get us to think.
So I will start:
MSPA Certification Fees
Milage to shops and certification
Some internet Expenses
Fax Machine Depreciated
Ink for your Printer
Stamps
Digital Camera (use for Mystery shopping)
Copy Fees
Printer Paper
If you bought any extra storage for a business email

Now these are just things off the top of my head. I am not an accountant and I am not with the IRS so I could be wrong, but I did take many accounting classes in College and that is what I learned.

Please add more everyone

Shopping Minnesota
Gold Certified lmfgsr

CherylW
Valued Contributor

Riverview, FL
USA
197 Posts

Posted - 01/14/2004 :  06:22:05 AM  Reply  Reply with Quote
I plan on deducting a portion of my cell phone bill. I also just started mystery shopping last year so I have a few receipts from the beginning when I bought folders, pens, highlighters, calendar, envelopes, files, etc. I also have a few toll receipts.

I have unlimited long distance, but don't forget these calls as a deduction.

MSPA Gold Certified
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Marcy
Valued Contributor

Terre Haute, IN
USA
191 Posts

Posted - 01/14/2004 :  11:05:28 AM  Reply  Reply with Quote
I also am going to expense faxes I sent to numbers that were long distance. I keep a log every month of my faxes sent as well as my long distance bill and will write those off.

Marcy ~ mystery shopper in western Indiana.
MSPA Silver Shopper certified #ijjaaf
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.ShannonPA
Inactive

PA
USA
415 Posts

Posted - 01/28/2004 :  12:14:16 PM  Reply  Reply with Quote
Thanks for starting the list. I will refer back to it once I start doing my tax return.

Remember a watch is NEVER deductible, even if you buy it specifically to record shop timings. That is straight from the IRS website. Read that last year. Stuck in my head.

MSPA Gold Certified uwjrsy
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Terri-CA
Star Contributor

CA
USA
272 Posts

Posted - 01/28/2004 :  2:08:33 PM  Reply  Reply with Quote
From the Harris Direct website:

There is a special break available to most sole proprietors (and most other small businesses as well). It's called the "section 179 deduction," and it permits an immediate write-off for up to $100,000 of tax-year 2003 equipment additions. Even last-minute additions qualify, as long as you start using the stuff before that giant disco ball at Times Square comes all the way down. Understand this is a "use it or lose it" concept. There's no carry-over into 2004 if you fail to take full advantage of this year's $100,000 allowance. The deduction is also limited to your taxable income from business activities. The equipment in question must be purchased. Both new and used are OK. Finally, it must also be used over 50% for business.
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.Dawn DE
Inactive

DE
USA
518 Posts

Posted - 01/28/2004 :  3:26:25 PM  Reply  Reply with Quote
Yes, I used 179 for my fax machine this year. It's a great option to use if you had an equipment purchase that was really too small to bother depreciating (I feel that way about items less than $500.00, but that's just me). For larger purchases, depreciation can be a pain but it's the way to go, especially if you expect larger income next year. If you use tax software or has a preparer who does, have them look at it both ways, to make sure the 179 doesn't put you in the loss side on your Schedule C.

Dawn
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CathyInMD
Star Contributor

MD
USA
441 Posts

Posted - 02/16/2004 :  12:28:31 PM  Visit CathyInMD's Homepage  Reply  Reply with Quote
I was wondering if a digital camera would be depreciated rather than expensed. Maybe it would depend on the cost associated with the camera. I would think the supplies for the camera would be expensed. What do you think?

MSPA Gold Certified
Shopping In Maryland
xiffkw
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.Dawn DE
Inactive

DE
USA
518 Posts

Posted - 02/16/2004 :  5:15:26 PM  Reply  Reply with Quote
Since a digital camera falls under special rules (which apply to property generally used for entertainment) it must be listed property. That means that you must give a percentage that you use the camera for business (you can't deduct 100% of the cost). Cell phones also are in this category. You can depreciate the percentage of the cost based on it's business use, but it must be more than 50% for business to claim the 179 deduction. Personally, I listed mine as 80% use, than depreciated it over 5 years as is the standard for photographic equipment. Pages 14-15 of Pub 587 describes listed property and depreciation, and also refers to Pub 946 (Overview of Depreciation). A discussion of listed property begins on page 50. New this year, computer software is now eligible for 179 deduction. Also remember, for 179 deduction, the item must be purchased new specifically for the business (not something you already owned, then decided to use for MS work).

Dawn
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.TammySGilliam
Inactive

Bourbonnais, IL
USA
139 Posts

Posted - 03/29/2004 :  1:00:26 PM  Reply  Reply with Quote
Are there any other items that are not listed so far than anyone can think of that we can write off as expenses? I am trying to get a list together. What about if I bought a new desk for my office?

Take care,
Tammy G.
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Daree76
Trainee

Hampton, VA
USA
6 Posts

Posted - 08/03/2004 :  07:32:13 AM  Send Daree76 an AOL message  Reply  Reply with Quote
The IRS has some excellent (and FREE) CDs available for ordering at
http://www.irs.gov/businesses/small/article/0,,id=101169,00.html . I ordered the "Small Business Resource Guide" and "Introduction to
Federal Taxes" CDs, and found tax information presented in an easy-to-understand tutorial format.

The IRS also has a comprehensive self-employed/small business section of their site with related links. The Self-Employed Individuals or Independent Contractors section can be found at http://www.irs.gov/businesses/small/article/0,,id=115045,00.html

Daree
MSPA Gold-Certified (#zmdvax)
Shopping Chesapeake, Portsmouth, Suffolk, Norfolk, Virginia Beach, Hampton, and Newport News
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MikeSLU
Star Contributor

SE
USA
319 Posts

Posted - 03/23/2005 :  10:20:56 AM  Reply  Reply with Quote
When I do restuarant shops --- on the Schedule C, what category do you put in the cost of meals and tips as an expense? Supplies possibly? Inquiring minds want to know......
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HollySHarper
Apprentice

Indianapolis, IN
USA
3 Posts

Posted - 03/23/2005 :  11:52:14 AM  Reply  Reply with Quote
Forgive me if I'm re-stating something that has already been said, but I've read so many posts in this taxes category that my head is spinning! I was working on mine last night with Turbo Tax and here is what I've interpreted, now of course the IRS may say differently.....

Deductions - any office supplies that you used for your shopping business can be deducted. Whether it is printer paper, staples, pens, folders, etc., it doesn't matter as long as it was used for your business.
If you're filing as a home office and claiming those deductions as well, there are a lot other items you can deduct that I had not imagined. Because they calculate the size of your "office" they theyn calculate a percentage of the totals of these other items to "match up" with the square footage percentage. (hope that makes sense) For instance, it specifically says in Turbo Tax that you can deduct pest control expenses as part of your business expense. Well, I had my house sprayed for ants and bees last year, so guess what, I'm deducting that! I also included my security alarm. It protects my office as well as my home, so I figure I can deduct a portion of that as well.

I do have a couple of questions of my own however. I kept track of my mileage, with the great expectations of being able to deduct them, but Turbo Tax won't let me do this. Could this be because of my fulltime job? Turbo Tax asks for 3 mileage figures. The first one is total mileage for the year, so entered that, lets say 33,000. Then it asks for deductible (or similar) mileage and I put 5500. Then it asks for a 3rd, something like personal mileage or something, and I took my best guess at that. Well, after entering them it came back and said I was not eligible for the mileage deduction. I drive 100 miles a day to my full time job and so I put a lot of miles on my car, add to that the miles I drive for mystery shopping and merchandising, it really adds up! I was really looking forward to the deduction and don't understand why it won't allow me to take it.

Also, If I take the 179 deduction for one piece of equipment, do I have to take it for all? For example, I bought a fax machine and digital camera last year, My computer and printer were bought in previous years. Would I be less likely to get the red flag on my digital camera if I took the 179 deduction rather than depreciating it?

I feel like I have a good grasp on what I'm doing, and that I'm doing it right, then I come and read through all of these posts for something specific, and now I'm beginning to doubt all of my choices in deductions, filing, etc.

Can anyone answer this? I am filing my mystery shopping as a home business, but it is a part-time job. Is that ok? And I entered all of my income as misc. income, not on the schedule c, is that alright? Also, I'm not sure how to show expenses I shelled out during shops, and then the reimbursement for them.

Sorry for all of the questions, that wasn't my intention, but I sorta got out of control when I started typing!

Happy taxing! Er, I mean shopping

Holly Harper
MSPA Silver Certified
Shopping Indianapolis & Surrounding Areas
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Deanna
Contributor

Hamilton, OH
USA
94 Posts

Posted - 03/23/2005 :  9:23:51 PM  Reply  Reply with Quote
Holly,
If you want to take the deductions, you need to enter your income on Schedule C.

You can use Sec. 179 for whichever qualifying assets you choose. The deduction will be allowed currently only to the extent that your business is profitable; any excess will be carried over to use against a future profit. If you are talking about a piece of office equipment that only cost $200-$300, I'd probably just expense it with office supplies. If it is a $1,500 laptop, you should use Sec. 179.

I can think of a few reasons for the problem with the mileage deduction. Make sure business mileage plus personal mileage does not exceed total mileage. Make sure you've answered properly any related auto usage questions. And for the mileage to be deductible, it will need to be linked to your Sch. C or to Form 2106 Employee Business expense (used by some merchandisers who are employees.) When all else fails, multiply your business mileage x .375 per mile and fill it in directly on the Schedule C auto expense line. Remember, you can take actual expenses or standard mileage, but not both.

MSPA Gold Certified #ct8cxq
Shopping Hamilton, Fairfield, West Chester and the northern Cincinnati suburbs.
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HollySHarper
Apprentice

Indianapolis, IN
USA
3 Posts

Posted - 03/24/2005 :  09:14:40 AM  Reply  Reply with Quote
Deanna,
The first line of your reply was the biggest help! Thank you! That has to be the source of most of my frustration, so hopefully after changing that, everything else will fall into place. Also, I didn't realize you could enter mileage into the auto expense section instead, so that will be my 2nd option! Thanks!

Holly Harper
MSPA Silver Certified
Shopping Indianapolis & Surrounding Areas
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Karan
Star Contributor

Lugoff, SC
USA
2507 Posts

Posted - 03/24/2005 :  5:53:53 PM  Reply  Reply with Quote
You may depreciate your computer and your laptop. You can also deduct software for the computer, ISP expense based on percent of usage for work v. pleasure. Yu may deduct any unreimbursed expense for your shops. You know, the ones where they make us buy a $1.00 item but tell us we will not get this back. Or the restaurant shops where they reimburse for food but will not pay the tip.

Karan now residing in the Palmetto State
MSPA GOLD CERTIFIED
UNDERCOVER VIDEO SPECIALIST
{Shopping Columbia and surrounding Richland and Kershaw Counties}
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JenS
Apprentice

USA
4 Posts

Posted - 03/25/2005 :  3:14:59 PM  Reply  Reply with Quote
Mike - I am wondering where to list that too - have you found the answer yet?
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HollySHarper
Apprentice

Indianapolis, IN
USA
3 Posts

Posted - 03/28/2005 :  12:53:21 PM  Reply  Reply with Quote
Cheryl,
I'm sure someone will correct me if I'm wrong, but I have lumped all of my "shopping" expenses together. Any expense directly related to a shop I have conducted, whether it's a purchase, food, tip, parking, etc, I have added all of them together and called them mystery shop expenses. Office expenses are another totally different category all together. Don't take my word on this, but that's how I am doing it. I will say that this is the first year that I'm doing taxes with my shopping income, and I purchased Turbo Tax, and it has to be about the most wonderful software ever! It's very easy to use, and it's extremely easy to understand. If you don't understand something, you ask a question and it will try to find the answer for you. I HIGHLY recommend this software to all do-it-yourself-tax-preparers!

Holly Harper
MSPA Silver Certified
Shopping Indianapolis & Surrounding Areas
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SusiWeb
Member

Athens, AL
USA
14 Posts

Posted - 03/31/2005 :  2:03:00 PM  Reply  Reply with Quote
I am so thankful for this thread!
I started mystery shopping/merchandising last year-went full-time late last years. So now, I am (the last day of the 1st quarter) setting up my records for this year. I have a clarification question on auto expenses.
I keep all records on miles driven (cross ref'd with location/shop), gas receipts, car repairs and maintenance, road hazard insurance, plus tags, taxes and auto insurance.
Deanna's post reminded us that we can claim actual expenses or standard milage, but not both. Am I understanding correctly that I can use the above actual expenses OR standard milage?
Thank you!!!
Suz

Shopping and merchandising northern Alabama
silver certified #px7spz
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Deanna
Contributor

Hamilton, OH
USA
94 Posts

Posted - 04/01/2005 :  07:19:28 AM  Reply  Reply with Quote
You can either use standard mileage ($.375 for 2004, $.405 for 2005) based on the miles driven for business, or you can use a portion of actual expenses based on the percentage of business use. If you drove 12,000 miles total in the vehicle, and 6,000 of them were for your business, you could take 50% of your actual costs, including half of the allowable depreciation or lease expense as well as half of the operating expenses SusiWeb listed.

Parking fees and tolls paid for business are 100% deductible regardless of which method is used. The business portion of otherwise nondeductible auto loan interest is deductible as interest on Sch. C, regardless of which of the two methods you use, if you are self employed. If you are an employee, it is not deductible at all.

More detail on car expenses can be found in IRS Pub. 463.

Also, for a fairly layman-friendly tax reference, I suggest "J.K. Lasser's Your Income Tax 2005." It is about 2 inches thick and filled with tax information. Your accountant might even use it as a reference.

MSPA Gold Certified #ct8cxq
Shopping Hamilton, Fairfield, West Chester and the northern Cincinnati suburbs.
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KimBie
Star Contributor

USA
607 Posts

Posted - 04/01/2005 :  2:31:04 PM  Reply  Reply with Quote
quote:
Originally posted by Deanna

The business portion of an otherwise nondeductible auto loan is deductible as interest on Sch. C, regardless of which of the two methods you use if you are self employed.


Just to clarify... the business portion of the interest, not the entire loan payment, is deductible as interest.

Kim
MSPA Silver Certified
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Deanna
Contributor

Hamilton, OH
USA
94 Posts

Posted - 04/01/2005 :  9:02:24 PM  Reply  Reply with Quote
Thanks, Kimbie. I rephased that to make a little more sense.

MSPA Gold Certified #ct8cxq
Shopping Hamilton, Fairfield, West Chester and the northern Cincinnati suburbs.
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