for those who do swagbucks and other reward sites, a question

[tarheel618]

I want to really take advantage of this in the new year. But I want to know how I claim this affect my taxes at the end of the year?

CAn someone give me some input?

 

[coffeecassie]

I think you have to receive more than $500 of rewards or prizes from an individual site before you have to pay taxes on them.

 

[richmond282]

I think you have to receive more than $500 of rewards or prizes from an individual site before you have to pay taxes on them.

I think this is correct as well. Not totally sure though.

 

[plummer925]

I think you have to receive more than $500 of rewards or prizes from an individual site before you have to pay taxes on them.

Well, that's technically not correct. TECHNICALLY we are supposed to pay taxes on ALL money received. The sites won't report it to the IRS with a 1099 unless it's over $600 (which is what the IRS requires). So, the IRS wouldn't know you made the money if you don't get a 1099 for it. Just like technically you are supposed to report ALL income from ebay, yard sale earnings, and even babysitting your neighbors kid. ANY income that comes in (including some gifts) are legally taxed here in the USA. Whether or not the IRS knows about that income is what makes people decide whether or not to report it to them. But that becomes a MORAL issue, not a LEGAL one.

BUT...even if you have to pay taxes on it...isn't it worth doing? I mean, if I'm in a 30% tax bracket and I make $1000, sure, it's $300 taxes, but I'm still ahead $700.

Plus - if it's a prize from a contest (verses something like swagbucks) you can deduct your "losses" if you itemize (scratch tickets, lottery tickets, etc are all losses).



My recommendation - if it's a concern, consult your tax professional

 

[tarheel618]

I usually do my taxes using an online tool- very basic taxes here. Where or what would I look for to claim it? I guess if I get a 1099 that would be easy to claim.

And yes- it is worth it. I would loved to earn some extra money.

 

[richmond282]

Just like technically you are supposed to report ALL income from ebay, yard sale earnings

Actually you only have to claim PROFIT income from these types things. If you sell a used item for less than you paid for it (like a quarter at a yard sale) then you don't have to claim that. That's the way it was explained to me b/c you didn't make a profit on it.

 

[Sadie22]

Businesses are not required to send 1099s to those to whom they paid less than $600. You better believe they report all they pay out so they can claim it as a business expense. That's why they get your tax ID number. Just because you do not get a 1099 does not mean the IRS does not have records of what you received.

 

[richmond282]

swagbucks does not ask for a tax ID number.

 

[plummer925]

Actually you only have to claim PROFIT income from these types things. If you sell a used item for less than you paid for it (like a quarter at a yard sale) then you don't have to claim that. That's the way it was explained to me b/c you didn't make a profit on it.

No, you have to claim the FULL amount and if you do it as a business, you are permitted to claim the costs associated. If you do it as a hobby, you are not permitted to claim the expenses.

Seriously, consult with your tax advisor - what you are telling people is NOT IRS law.

 

[delmar411]

Businesses are not required to send 1099s to those to whom they paid less than $600. You better believe they report all they pay out so they can claim it as a business expense. That's why they get your tax ID number. Just because you do not get a 1099 does not mean the IRS does not have records of what you received.

They don't get your tax number until they are going to send you money that puts you over $600 IME. We have never provided it to any company until that point and the IRS makes it a huge PITA to claim that money as income too. They are not setup to deal with these types of reward sites paying out money.