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Level 2
posted Feb 25, 2020 5:07:26 AM

Product Reviewer - What do I count as income and deductions

I started a side gig (hobby) where I get products from a review website. I buy the product on Amazon and the review website then provides a refund (exactly how much I paid for the product on Amazon) to my PayPal Account. Do I need to claim these payment exchanges on taxes - they equal $0 at the end. I get refunded exactly what I paid for the product. How do I deal with these for tax purposes?

 

Additionally, I get a small fee for each product I get. Usually around $2-3. I've made around $1000 for the entire tax year of 2019. How do I handle this extra income on taxes? Do I classify this as income from another source?

 

Thanks!

 

0 3 3376
1 Best answer
Expert Alumni
Feb 3, 2023 5:03:16 PM

You will need to enter your 1099-K as self-employment income and then list the expenses for the items purchased as expenses to offset the income.  Be sure to include any fees PayPal may charge you for processing the reimbursements.

 

To enter your 1099-K into TurboTax Online you can follow these steps:

  1. Open or continue your return
  2. Search for Schedule C and select the Jump to link in the search results
  3. Answer the questions about your business. On the Let's enter the income for your work screen, select Other self-employed income
    • If you’re returning to Schedule C, select Review or Edit next to your work and then answer the questions about your business
  4. On the Tell us about other self-employed income for your work screen, enter your 1099-K info
  5. Select Continue when finished

TurboTax will then walk you through adding expenses to the Schedule C.

 

@Drago12354

3 Replies
Expert Alumni
Feb 25, 2020 5:34:55 AM

You would include this income as Other Income in the Federal Section>Less Common Income>Miscellaneous Income> Other Reportable Income.  Since you are reimbursed the full amount of the product you purchased you just need to report the additional income you earned on your return.

 

Link to Side-Giggers: Tax Tips for Side Jobs

Level 1
Feb 3, 2023 4:41:21 PM

Is this still a valid solution in 2023? I am in the same situation as OP. I review Amazon products and get reimbursed through PayPal but this year, PayPal and other online payment services are required to issue 1099K forms to account holders who receive over 600 USD. I anticipate receiving a 1099K form from PayPal in early January 2024. 

I am certain I have to report whatever is on the 1099K form on my tax return, even if they are reimbursements and not actually 'income'. I also knowledge the fact that hobby expenses are not deductible. In what way can I report my 1099K while canceling out my PayPal reimbursements with the expenses of the products? 

Expert Alumni
Feb 3, 2023 5:03:16 PM

You will need to enter your 1099-K as self-employment income and then list the expenses for the items purchased as expenses to offset the income.  Be sure to include any fees PayPal may charge you for processing the reimbursements.

 

To enter your 1099-K into TurboTax Online you can follow these steps:

  1. Open or continue your return
  2. Search for Schedule C and select the Jump to link in the search results
  3. Answer the questions about your business. On the Let's enter the income for your work screen, select Other self-employed income
    • If you’re returning to Schedule C, select Review or Edit next to your work and then answer the questions about your business
  4. On the Tell us about other self-employed income for your work screen, enter your 1099-K info
  5. Select Continue when finished

TurboTax will then walk you through adding expenses to the Schedule C.

 

@Drago12354