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How much does a sample have to be to have to pay taxes on it? Because, some people say any amount and others say, if it's over 100 dollars for the item? (self employed on tiktok and use the samples, to earn a commission)

Forum|Forum|1 year ago
December 4, 2024
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Best answer by Opus 17

If you file a tax return for any reason, you must report all your taxable income, no matter how small. If you are receiving free items from sellers, in return for featuring them in videos, you have two options.

You can report the activity as a hobby. In that case, the value of the items is taxable income and you can't deduct your production expenses. Or, you can report the activity as a self-employed business. You report the value of the free items as business income, and you can deduct your production and other expenses, but you pay both income tax and self-employment tax on the net profit. The difference between a business and a hobby is discussed here.

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax-purposes

There is no exception for low value items, anything that you receive of value for performing a service is taxable income. The sellers may only be required to file paperwork (some kind of 1099) with the IRS if the amount is over $600, but you are still legally required to report the income even if they don't report it.

X

xmasbaby0

Employee

A sample of what? What are you trying to do?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

A

AudieMSAuthor

I'm self employed and use the samples to earn commission. (on tiktok) But, I haven't earned any commission, but they say if the sample is over 100 dollars to file it as income.

X

xmasbaby0

Employee

If you want us to make any sense of this we will need more details. No personal information, though.

Samples of what? Where are these samples coming from? What are you doing with these samples? What self-employment income have you received? Have you received at least $400 of self-employment income?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

O

Opus 17Answer

Employee

If you file a tax return for any reason, you must report all your taxable income, no matter how small. If you are receiving free items from sellers, in return for featuring them in videos, you have two options.

You can report the activity as a hobby. In that case, the value of the items is taxable income and you can't deduct your production expenses. Or, you can report the activity as a self-employed business. You report the value of the free items as business income, and you can deduct your production and other expenses, but you pay both income tax and self-employment tax on the net profit. The difference between a business and a hobby is discussed here.

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax-purposes

There is no exception for low value items, anything that you receive of value for performing a service is taxable income. The sellers may only be required to file paperwork (some kind of 1099) with the IRS if the amount is over $600, but you are still legally required to report the income even if they don't report it.