Question

I Think I Made A Huge Mistake Joining Amazon Vine!

Forum|Forum|1 year ago
October 10, 2024
3 replies
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I think I made a huge mistake joining Amazon Vine! I was sent an invitation from Amazon asking me to join the Vine program because they liked how I write reviews for products I purchased with Amazon. I was told initially that I can order unlimited products from different sellers and all I had to do is to honestly review the products. They also said as long as I did not sell any of the products I recieve I would never have to pay anything. Then I was like a kid in a candy store and went overboard and ordered so many things but I kept up my end of the so called bargain and I wrote reviews for every product. Plus I kept every thing I ordered and I never sold anything and I never planned on ever selling any of the products and I never will sell any of the products I recieved. Then I was just notified I have to pay tax on everything I got. I was told when I signed up all I had to do was to review the products honestly and I got to keep everything, and keep it all for free. Now I have to pay taxes....I have been so upset that I have literally gotten myself sick over this. If I knew this was going to happen I would have never done it and I think I got about almost 15 thousand in merchandise but everything I got was to fix up my house and to get things myself and my family could not afford all these years. There is no way I can afford to pay all of those taxes so would I be able to possible make monthly payments. I knew this was too good to be true and I realize I am an idiot that made a huge mistake....so tax wise what do I need to do? I am 67 years old and I have not had to file a tax form in decades so I am lost here. Thank you in advance.

Not A Product Question

T

taxlady28

Sorry you misunderstood the program. What you received is considered income and is taxable. After you compute your taxes owed, you can apply for a IRS installment plan the owed taxes.

R

rosetannerAuthor

Thank you so much for your advice!

A

Anonymous_

Employee

No text available

R

rosetannerAuthor

Thank you, I appreciate your help.

fanfare

Employee

If your amount is under $20,000 you may not be getting a 1099-K for 2024.

It depends on Amazon policy.

See here:

https://www.irs.gov/newsroom/irs-never-mind-the-myths-know-the-facts-about-receiving-a-form-1099-k-in-2024

@rosetanner

F

ForeverGrateful

Rose;

I am also very new to Vine, sounds like even newer than you. 🙂

I wish I could give you piece of mind regarding your taxes since you are so worried about them. Yes you will have to pay taxes, BUT ..... and someone else please correct me if I'm wrong, the fact that you said you have not had to file taxes for decades leads me to believe you either had no income or no taxable income. SO your tax obligation for $15,000 MAY not be as 'gut wrenching' as you have been feeling. I hope that is the case. As one of the other post states you can setup a payment plan if needed.

I will let you know that the next question that you will have to figure out is HOW to REPORT the income (there is a post on Intuit about this but no definitive answer) https://ttlc.intuit.com/community/taxes/discussion/amazon-vine-1099-nec-how-do-i-report-income-and-adjustments-on-turbo-tax/00/3138652 -

GOOD LUCK Rose we are in the boat together. 🙂

O

Opus 17

Employee

Reporting Vine income is not complicated. There are two options, depending on whether you classify it as a hobby or a business. If a business, you can deduct expenses (if you have expenses), and you pay both income tax and self-employment tax. If a hobby, you can't deduct expenses, but you only pay income tax, not self-employment tax. Whether Vine is a business or hobby is a question for each taxpayer to answer based on their own facts and circumstances. The IRS has some information here.

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

If reported as a business, you pay self-employment tax on net profits, no matter how much or how little other income you have. But you might not pay much income tax, if you have very little other taxable income. Again, the exact answer will depend on each person's total financial circumstances.

F

ForeverGrateful

Thank you so much for your insight !- I have concluded the same; either the income is a hobby or a business. I am leaning on filing it under hobby - BUT my amount in box 1 was a fraction of Rose's amount.

In an effort to get some reassurance for myself I called the IRS and spoke with six different reps over a 2 hour period and to quote what the rep told me when I asked about whether it is a hobby or business "I can't decide that for you, wish I had better information for you, that is a gray area" - so basically same as what you said.

The next question I asked was IF I claim the income as SE income then, since I'm 'self employed' can I pay myself and deduct my pay from the income reported in box 1 of the NEC - I thought the answer would be a simple YES - but to make a very long story short she said "That is not a question for the IRS"

She ultimately said "it sounds to me that it's possibly a hobby, but then you can not deduct expenses"

I mentioned that I had seen some Vine members online that had over $30,000 dollars in 'income' - she then said 'that does not sound like a hobby'.-

These questions are for me AND Rose -

1. If we report the income as self employment income can we PAY ourselves, and then deduct our pay from the amount in box 1 of the NEC?

2. Could we make record keeping it SUPER simple and pay ourself per order? I came up with the figure 15$ per order. (below in italics is SOME of what goes into a review) As a 'business' I know you are required to keep 'records'. I had MANY thoughts - pay myself as a writer, a writer would get paid per word so I would have to record how many words in a review, I could count the number of photos I have taken? That way would be a job in and of itself. I know Rose nor I have kept track of the hours we have spent 'looking' for an item to review, selecting the item to review, unwrapping, recycling the packaging, taking photos, testing the item, possibly installing the item, uploading the review and uploading the photos, re-submitting reviews. I asked the IRS about record keeping and their reply was ambiguous.

3. Does claiming the income as SE income make me a business?

BECAUSE: – IAW Amazon’s policy: “Participation as a Voice by businesses or organization is strictly prohibited.” – Why would Amazon send something out (1099-NEC) that would disqualify you from being a member?

Opus17- thank you for your time I know it takes effort to answer a post, insert links and SHARE your knowledge. I for one am grateful!