I'm an Amazon Vine reviewer, and as such I receive a 1099-NEC at the end of the year which tallies the estimated value of all the items I received for free as part of the program. I'm trying to reduce my tax burden, and it seems the only 'proper' way to do this is but using business deductions and donations. Some people in Vine suggest filling the income as hobby income in order to avoid the social security and Medicare self employment taxes, but everything I've read from tax professionals says that if you get a 1099-NEC it's an uphill battle convincing the IRS that it's a hobby.
So that brings me to what i see as my only other option, which is to reduce the net taxable business income. And i have 2 scenarios that I'd like confirmation on:
1. Donations. There are a few vine items that i could easily donate. I get a number of articles of clothing for my daughters or myself, and sometimes they don't fit or we just don't like them. If i donate them to salvation army or similar, can i simply deduct the estimated tax value in my 1099-nec? Let's say i get a onesie for free on Vine and Amazon says it has a taxable value of $19.99. It doesn't fit my daughter, so i donate it to salvation army and tell them it's worth $19.99. Does that completely negate my tax burden for that item? I definitely have some things that fall into this category.
2. Business Deductions. I select a wide variety of items to review on vine, and a lot of the items i get are building materials. For example, i have placed at least a dozen vine orders for 'ProPress' copper and brass plumbing fittings. I didn't have a press tool for installing these fittings, so i bought a vevor battery powered press tool about a month ago for $700. Can i deduct that $700 from my total taxable earnings for the year? Or does a $700 expense for testing $200-300 worth of plumbing fittings send up red flags to the IRS? In this particular case, I've only used the tool to test vine items. I'm sure I'll use it for personal use in the future, but i didn't buy it with any particular personal use in mind.
