Quick question about rewards programs...

[JiminyCricket59]

This is probably a really stupid question but, I have just recently started doing some rewards programs, but in the all terms and conditions it says something about paying taxes on your rewards. I was just wondering how everyone goes about this. Thanks

 

[tweetie1]

I'm certainly no tax expert but it is my understanding that you would need to earn more than $600 from your rewards programs during the year to have to report it as income. I know a lot of people who like myself who do a lot of paid-to-read sites and survey sites that report anything over $600 as income from hobbies. Most people however don't earn $600 in a year so it's not an issue.

 

[bartleby1]

Technically, according to the IRS, ALL income needs to be reported by you on your taxes.

Rewards programs are required to report when you earn over $600.

 

[M 'n C]

I think it was mentioned before on here that some of these sites are considered "rebate" sites and therefore don't have to report earnings for tax purposes.

Technically yes though you do have to report it as other income. Its just up to you whether you do or not because the IRS won't have any way to know how much you've earned if you keep it under $600 per site you do and they only can audit so many people &/or businesses in a year. The last stat I learned in my tax classes (2 years ago) was that the IRS only does about 2,000 audits a year on taxpayers.

 

[MyGoofy26]

I think it was mentioned before on here that some of these sites are considered "rebate" sites and therefore don't have to report earnings for tax purposes.

I always wondered about this. Especially with the shopping, but even some (most?) of the offers why it would be considered income when you're spending money and just getting some back. I know I don't pay my boss to let me come to work and have him pay me back a little more later on down the road if I clocked in correctly, LOL!

The most I've earned is a couple hundred in a year (for a single program) so it never really meant much to me, but something I wondered about. . . why it was considered income if a good chunk of it is actually a rebate.

 

[M 'n C]

I always wondered about this. Especially with the shopping, but even some (most?) of the offers why it would be considered income when you're spending money and just getting some back. I know I don't pay my boss to let me come to work and have him pay me back a little more later on down the road if I clocked in correctly, LOL!

The most I've earned is a couple hundred in a year (for a single program) so it never really meant much to me, but something I wondered about. . . why it was considered income if a good chunk of it is actually a rebate.

Right. That is where my confusion lies with some of these sites. Like I can understand paying the taxes on surveys but not on shopping or doing paid signups for things like zooba. I guess the thing the IRS would want you to do is split it and figure it out, claim it as income and pay taxes.

Its things like this where I am glad I audit for public companies rather than do taxes!! I couldn't imagine dealing with the tax code so heavily year end and year out.