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Product Testing as Income?

Forum|Forum|6 years ago
February 19, 2020
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Hello. I recently joined a product testing company (based in TX, I live in California). I am considered a "mystery product tester" because I first need to buy these products with my own money on Amazon, share the order number with the company, and once the product ships I get a 100% reimbursement as an ACH in my bank account (or I could choose PayPal too). So, I pay for it first, but get all the money back, making it a free product testing. Is the above in any way considered income or "gifts perceived as income" by the IRS. I have proof of all payments and reimbursements, if needed for tax purposes. I get many products that I end up sharing with friends an family, so they are not even all for my own use.

As a separate thing, I do get points for writing questionnaires and making product comparisons for the products (worth between $1.50 and $3.50) ans smaller payments (25-50 cents) for voting on product images/packaging. Once I reach $25 worth of point the company pays me via ACH for those. Now I do know that these are considered income, just like gift cards from taking surveys and have no problem with reporting that. I doubt this company would send a 1099, even if I earned over $600 worth of points, but am hoping they would not have to include the reimbursements as part of the income.

Thanks to anyone for helping me with this. I searched the internet but could not find answers.

Not A Product Question

Best answer by klehnhardt

You should enter these incomes under the self-employment income business.

To enter the self-employment income and expenses you would:

Enter self-employment income in the Search Magnifying Glass in the upper right hand corner of the screen.
Select Jump to self-employment income.
Answer the questions on the screens.

On your Product Testing self-employment, you would show your cost of the products and the reimbursement as income. On your Product Questionnaire and Product Comparison income you would add this as a separate income on the Product Testing self-employment. This is similar type of income. If you have any other "Out of Pocket" expenses, you can deduct them as self-employment expenses.

You cannot deduct the cost of the items you give to your friends as gifts.

If you received any income that exceeds $600 you should receive a Form 1099-Misc.

K

klehnhardtAnswer

You should enter these incomes under the self-employment income business.

To enter the self-employment income and expenses you would:

Enter self-employment income in the Search Magnifying Glass in the upper right hand corner of the screen.
Select Jump to self-employment income.
Answer the questions on the screens.

On your Product Testing self-employment, you would show your cost of the products and the reimbursement as income. On your Product Questionnaire and Product Comparison income you would add this as a separate income on the Product Testing self-employment. This is similar type of income. If you have any other "Out of Pocket" expenses, you can deduct them as self-employment expenses.

You cannot deduct the cost of the items you give to your friends as gifts.

If you received any income that exceeds $600 you should receive a Form 1099-Misc.

R

Rk99Author

Thank you for your response KurtL1. Just wanted to make sure I understood that correctly. On the products themselves, In the event I do receive a 1099 or not that includes the reimbursements of the products as income, I would be able to enter the full price paid for each product as an expense, so that they sort of "cancel each other out"?

Thanks again!