SPIFFs are taxable income. You just will not pay the self-employment taxes (Social Security/Medicare) on that income. The issuer also does not withhold income taxes on the payments meaning you will pay the income taxes via your tax return or quarterly tax payments if you choose.
Entering the SPIFF as noted above should avoid a Schedule C generating as well as any self-employment tax forms. You can check your forms view in TurboTax online: Look for business income on line 8 and self-employment taxes on line 23.
- Click "Tax Tools" in the left hand menu
- Click "Tools"
- Click "View Tax Summary"
- Click "Preview My 1040" in the left hand menu
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