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datajana
Level 2

earned income via surveys and online studies

I participate in surveys and studies for gift cards, and I've been informed that if I earn over $600 I will have to report it as earned income.

I have researched, and am very confused: I've seen 1099, W-9, C-EZ, even the standard 1040 using a 1099?

I'm also confused about what exactly the income from the surveys/studies should be reported as - awards and prizes? Other income?

I've been keeping records of all my payments (which are all via Paypal, so there are statements there as well); if anyone can help me with my numerous questions, it would be greatly appreciated.


1 Best answer

Accepted Solutions
Mike9241
Level 15

earned income via surveys and online studies

self-employment income is subject to two federal taxes: income tax and self-employment tax  

 

if this is your only income, you are required to file a return if the net income from these jobs (self-employment)  is $400 or more. there won't be any income tax because you get a standard deduction at least equal to your net SE Income,  but you'll owe SE tax of 15.3% on 92.35% of the net income (effective tax 14.1296%  

 

If you had expenses incurred in earning this income (like postage or other direct costs) they can be deducted on Schedule C.  

 

there is only one form the 1040 and there will be schedules C and SE.

 

charitable contributions will not benefit you if this is your only income. they're not deductible on Schedule C and the net income for income tax purposes would be offset by your standard deduction

 

 

 

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8 Replies
Mike9241
Level 15

earned income via surveys and online studies

since it seems you're doing this on a regular basis and will get paid more than $600 during the year. the tax laws require that if a company expects to pay you over $600 during the year they will ask you to submit to them a W-9 form which asks you for information like your name, address, Social Security number or EIN (employee ID number).  by January 31st of the following year they will provide you with form 1099-NEC or 1099-MISC which will show how much they've paid you. it’s all considered taxable income whether you get the 1099 form or not and regardless of whether any company pays you $600 or more. a company can issue you a 1099 even if they pay less than $600. 

this income and expenses related to earning this income are reported on schedule C.  if net schedule C income is more than about $433 not only do you owe income taxes on the net profit but also self-employment taxes on 92.35% of the net profit.  SE tax can be up to 15.3 % of this amount but you are allowed a deduction for 1/2 the SE tax.  

TurboTax will compute the SE tax and the deduction automatically if you are subject to it.  there are other things in connection with schedule C so when you go through the step-by-step questions make sure to read them carefully and if not sure of how to answer post another question in this thread.

 

for the principal business description you can use "survey taker" as for the code number 541990 or 999999

 

 

Hal_Al
Level 15

earned income via surveys and online studies

All income is reportable, no matter how small the amount.

 

The $600 rule only applies to the person/company paying you.  They must issue a form 1099 if they pay you more than $600.  The IRS considers anything on a form 1099-NEC to be self employment income. 

 

How you report the income (what type of income) depends on the details of your activity, whether it is "other" (unearned) income or self employment (earned) income.  For guidance, see https://www.irs.gov/newsroom/hobby-or-business-irs-offers-tips-to-decide

 

I agree with Mike9241, it sounds like you have self employment. 

 

datajana
Level 2

earned income via surveys and online studies

I will most likely not be receiving a form of any kind because of the different sites I use; it all adds up to over $400 between them all.

 

I’m assuming that I will still need to file, regardless. It will be the only income that I will file, as well. Which form should I use? And is there anything I should be aware of?

 

I also might be able to deduct a charity donation - it adds to the form confusion.

 

Thanks so much for your help.

Mike9241
Level 15

earned income via surveys and online studies

self-employment income is subject to two federal taxes: income tax and self-employment tax  

 

if this is your only income, you are required to file a return if the net income from these jobs (self-employment)  is $400 or more. there won't be any income tax because you get a standard deduction at least equal to your net SE Income,  but you'll owe SE tax of 15.3% on 92.35% of the net income (effective tax 14.1296%  

 

If you had expenses incurred in earning this income (like postage or other direct costs) they can be deducted on Schedule C.  

 

there is only one form the 1040 and there will be schedules C and SE.

 

charitable contributions will not benefit you if this is your only income. they're not deductible on Schedule C and the net income for income tax purposes would be offset by your standard deduction

 

 

 

datajana
Level 2

earned income via surveys and online studies

So I’ll need to fill out both a 1040 Schedule C and SE? 

 

Hal_Al
Level 15

earned income via surveys and online studies

Q.  So I’ll need to fill out  a 1040 and include both Schedules C and SE? 

A. Yes.  You'll also, most likely, include form 8995, Qualified Business Income (QBI) Deduction. 

 

TurboTax does all that fairly smoothly. You'll need the "Self Employment" edition online.  Any version. of the download software can handle self employment.

datajana
Level 2

earned income via surveys and online studies

Thank you!

I'm also seeing that I will need a business code? 

The closest I can find is Market Research and Opinion Polling - would that be the correct one to use?

Hal_Al
Level 15

earned income via surveys and online studies

Q.  Is the business code for Market Research and Opinion Polling the correct one to use?

A. Yes.  But it's a minor item and doesn't matter much. The IRS just uses it for statistical info.  If in doubt, you can use the generic 999999.

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