I work as a mystery shopper and I get reimbursed for the purchases I make counting as my income, how can I classify those amounts as expenses?

[dianapj901218-gm]

I received a form 1099-NEC, but it includes the reimbursed amounts for the purchases I make as a mystery shopper as my income. How can I report most of that income as expenses and how do I classify those expenses? Thank you!

[Vanessa A]

To enter your self-employment income click the following:

• Federal
• Income and Expenses
• Show More next to Self-Employment
• Start or Revisit next to Self-Employment
• Yes, to you have any self-employment income or expenses
• Enter the type of self-employment work you do
• Click through a few more screens and you will get to a screen that says "Your XX info"
• Click Looks good
• Then you will come to a screen that says Let's enter the income for your business.  It will give you the option of 1099-NEC or Other self-employed income including the 1099K , cash and checks.  Select the one that applies to you and hit continue
• If you do not select one, it will not let you enter your income
• Enter your self-employment income on the next screen

As for expenses, it depends.  These items are technically additions to your income since you are receiving items for your work as well.  You cannot deduct these expenses as bartering income is taxable income. This would be the same as an employer or client paying you in motorcycles.  The cost of the motorcycle would be included in your income.  

Although you cannot deduct the items you received as expenses, you can deduct your mileage to do the shopping as well as other expenses directly related to the shopping.