Business deductions & Donations for Amazon Vine reviews

[rfehr613]

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.

[Bsch4477]

You can donate items but the deduction would not be from your business income itself but rather an itemized deduction on your personal return just as any other similar charitable deduction. 
You might have difficulty deducting something that cost more than the income from what you are testing. 
However you can deduct a business use percentage of your internet, computer and monitor expenses required for your Amazon Vine business activity. 

[rfehr613]

Thanks for the reply. 

What difference does it make where the donation deduction comes from?  Its all part of the same pot, no?  I don't file anything separately from personal income.  And are businesses not allowed to donate items and write them off on taxes?  These would all be donation in the capacity of a business, since Amazon wants to call Vine membership a "business" for tax purposes.

Regarding the other deductions for Vine reviews, I understand that I can deduct a portion of household expenses, as we already do that for my wife who works from home.  I assume it works in much the same way for Vine (a flat percentage based on office SF:total SF).  But for equipment purchased, what exactly is meant by "might have difficult"?  Would the IRS deny a tax filing on the spot, or are you only talking about in case of an audit?  I understand that logic and reason says that an expense exceeding the cost of the items being tested doesn't make sense, but who defines the parameters?  If I were just starting up a conventional business, I might have high initial out of pocket expenses that far exceed revenue generated.  Would those expenses not be deductible simply due to their magnitude?   That does not sound correct to me.

[Bsch4477]

While a corporation can deduct a charitable donation as a business expense, a sole proprietor cannot. 
If you believe that you can justify your expense in an audit by all means try it.