Hi

My husband I currently work full time jobs, but I'm considering a second job as a mystery shopper.

I would receive 1099's at the end of the year from each company that paid me over $600 during the year. The pay for shopping is generally between $5 to $25 per shopping experience (not much, but not difficult work either!)However, if working this second job would cause a large tax bill at the end of the year, I'm not going to pursue it.

Any advice on how to decide if it would pay to work this type of second job? I do NOT want to receive a big hit - not worth it!

Thank you for any comments!

Daffodil

AtlantaTaxExpert

Daffodil:

A lot depends on how much you make in your first job.

If it is over $90K, then the 1099 income as a mystery shopper will only be subject to income tax (at your marginal rate, probably 25%) and the Medicare portion of the self-employment taxes (only 2.9%), plus whatever your state income tax would be.

If it is under $90K, then the 1099 income is subject to federal and state income taxes PLUS self-employment taxes at 15.3%. Assuming you file jointly, that would mean every mystery shopper dollar would be subject to:

- federal income tax (probably at 25%)
- state income tax (at whatever you state income tax rate is)
- self-employment taxes (at 15.3%).

So your tax rate is somewhere between 40 - 50%.

You have decide whether it is worth it or not.

Daffodil

Thank you so much for the reply. At first glance, this looked like a fun little second income, but at those tax rates - YIKES! Jointly, we are under 90K.

Not worth it, I'm afraid. I'll have to keep looking for a second source of income that won't be subject to such a high tax rate.

I appreciate the info

Daffodil