side vitamin business - commissions only

Forum|Forum|3 years ago
July 26, 2023
3 replies
38 views

I'm no longer wanting to work this business. I'm retired and getting SSI and a Pension. However, I do receive a commission every month from subscribers who c of the vitamin business who continue to purchase the vitamins. So, if I no longer want to claim deductions from this business, how do I report commissions? Do I still need to file the business Schedule C to report them?

Ask the Experts - Retirement - July 2023

OCrawford

Level 2

@Terrybear4ofus

Are you doing this with the consideration of making a profit.

Thank you,

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MartyG

Level 4

Hi Terrybear4ofus!

Since the commissions are a result of your efforts to earn a regular income, I cannot come up with a rationale to say that they are not Self-employment income subject to self employment tax.

With that in mind whether your report it on schedule C or not, it is income subject to Self Employment tax. So therefore, if you have ANY ordinary and necessary expenses related to that income, it behooves you to take it as a deduction on a Sch C.

Bottom line, you have to claim the income, so I would claim whatever expenses you can related to that income to reduce your income tax.

I hope that helps!

Marty

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Terrybear4ofusAuthor

Level 2

Thank you for the information, much appreciated. I just wanted to mention, the commission I receive for the entire year is usually between $800-1000. Very little. The only reason I continue with this business is because I get my vitamins paid using my commission. I don't get them free for being in the business. I still have to pay for them so maintaining the business helps me pay for my vitamins. I'm not profiting much but it's a passive income and it's something. I think I will continue to file schedule C even if there are very minimal expenses. I'm just concerned that the IRS will see that the income is very low so why do I even have expenses. I've been doing this for over 5 years now with very low commission because I don't want to sell anymore.