I am brand amassador for Younique. I do not make enough with them yet for them to send me a 1099. My tax form I print off from there website shows PRS-Self (Discount)** and PRS Customer. How is the discount taxed vs a commission paid.

[mgordon]

The earners report from Younique  shows PRS-Self (Discount) and PRS-Customer.   At the bottom of my report there is this comment "** PRS-Self relates to personal retail commissions earned of personal purchases through one's own website. These amounts are considered as a discount and not a commission paid. Consult with your tax adviser for proper treatment." What is the proper way to treat the discount when it comes to income? Most of my makeup sales have been for me and I use them when I am doing my makeup demonstration videos.

[NCperson]

@mgordon - can you please explain how the money flows? is Younique selling you product at a discount from what they normally sell it for and then you turn around and either use it in your business or sell it to others? 

[Opus 17]

Hmmm.

https://finance.yahoo.com/news/8-controversial-mlm-schemes-stay-210103131.html?guccounter=1

Generally speaking, discounts are not taxable.  If you get a product discount because you follow a certain program, that is not taxable, even if you are making videos or promoting the product on social media.

Money paid to you (cash, PayPal, cash app, Venmo, etc.) because people buy products with your code would be considered taxable commission income.  You would be considered to be self-employed and file a schedule C.

If self-employment is your only income, then you are not required to file if your net profit (income minus expenses) is less than $400.  If you file a tax return for any reason, then you must add all your income, even if it is less than $400 and even if you don't get tax paperwork from the payer.

When you are self-employed, you are expected to keep accurate business records of your income and expenses, and report these on your schedule C as part of your tax return, even if you don't get paperwork.  You report your gross income, and you can deduct "ordinary and necessary" expenses.  For example, if you make videos, you may be able to deduct the cost of your camera and video equipment.  You pay income tax and self-employment tax on your net profits. 

[mgordon]

Products are sold on a website provided by Younique. When I purchase the product on my own account for my use for either business/personal use, I get a 20% discount. When I have a customer login to their account and purchase, I receive a 20% commission from their purchase.

We get a report that shows our earnings for the year. One column lists PRS - Self (Discount) and the second column shows PRS-Customer. Basically I just want to make sure that when I file my taxes, I included the discount I am paid by Younique along with my commissions earned for customer sales.

[NCperson]

@mgordon - all the money you receive, regardless of its source is reportable income.  

The commisisons you receive are reported as taxable income.

The product you receive at a discount is NOT reportable income nor is the discount itself reportable income

Rather, the product you receive that is used in the business is a business expense at the cash price you paid the supplier.  The product you receive for personal use is NOT a business expense and can not be reported on your tax return as either an expense or income.