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, needs to know that you’re legally authorized to work in the US, (or Canada, or wherever you’re shopping) and because of that, they need your social security number.
Even though you’re 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.
Now, I wouldn’t just go around willy-nilly giving out your SSN to every company out there first, of course make sure that they’re legitimate, and if you’re submitting this information online, make sure it’s a secure site. You can see the little https:// in the address bar before the site’s name. Any company that uses Sassie or Prophet for their scheduling has a secure database, so I’d trust those as well.
I do recommend that if you’re contracting with several companies to get 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.
Good luck, and happy shopping!