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Dear WAHFAQ,
It seems like every Mystery Shopping company that I sign up for wants my social security number. I don’t feel comfortable giving it out. What should I do?
I know that Mystery Shopping does sound a little too good to be true, and it can feel like a scam when you’re first getting started, but, believe it or not, this is a job!
Your employer, the mystery shopping company, will need to report your income to the IRS. Even though you’re considered an independent contractor, if you make over $599 with any one company, they are legally required to send a 1099 form to the IRS and one to you as well. If they don’t have your social security number, they will not be in compliance with this law and get in BIG TROUBLE.
If you don’t make more than $599 with a Mystery Shopping company, they don’t have to do the extra 1099 paperwork. However, they still claim you as an expense for doing business. The IRS may turn around and come to you to make sure that you claimed the income and paid taxes on it. So, yes, kids, you always need to declare your Mystery Shopping income.
Mystery Shopping companies don’t want to take the time and effort to get all of their shopper’s tax ID information at the end of the year, so instead they’ll ask for it right up front.
If you’re uncomfortable giving our your SSN, consider getting an an EIN (Employer’s Identification Number) for your business. I personally have worked for over 150 Mystery Shopping companies and I much prefer to use an EIN instead of my SSN for tax reporting. Getting an EIN is free from IRS.gov, just be sure to use it within 2 years otherwise they’ll take it back! Talk to a local tax advisor if you have questions…you can find assistance through your local SCORE.org office.
Of course, each Mystery Shopping company is different – some require that you use your SSN, others require that you use an EIN. It all just depends on what they want. And, you certainly have the choice to work with whichever companies you choose. If a company requires your SSN, but you’d rather use your EIN, you could simply not work for that company!
Think about all the extra money you could make by being a mystery shopper, starting your own business, or working from home for a legitimate company. Take control of your income and check out our LEARN page for a list of classes, books, and more!
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