Free samples from Tik Tok in exchange for a (commercial, basically) created by me. Taxable.and at what rate?

[justbecauseiwantto]

Tik Tok has a program for.creators where different businesses, many of them in China, send free samples with free shipping to the creator, and the creator is required to make a video featuring the item within 7 days.  It is my understanding from other creators that this is considered taxable income.  I have looked.on the IRS website and found very ambiguous information and nothing pertaining to this specific situation. 

I am planning ahead for my taxes and I'm not a business, but I need to know at what percentage I can be taxed, and if.it is.taxed.on the cost of the item plus shipping.ir just the cost of the item.  Plus, the price is listed on the listing.of the item sometimes as "$14.99 -$25.99", for example.  The shipping slip shows zero value on the receipt. 

I understand that over $500 value (is that accrued items?  Or one item $500) is taxable and if I remember right the IRS website said $100k or $150 k is considered a business.  

I need some actual answers. I don't want any nasty surprises at the end of the year. 

[VolvoGirl]

Are you selling anything or making income from getting free products?  You pay tax on a profit not on the cost.   You might be self employed but we need more info.

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Premium or  Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

What Self Employed expenses can I deduct?

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

[rjs]

You ARE a business. What you are selling is the videos that you make. Instead of being paid for the videos in money you are paid in products. The value of the products is your business income, regardless of whether you sell them or keep them. There is no minimum amount that makes it a business. If you get paid even a small amount, in money or goods, to make videos, you have a business.

The amount that you should report as income is the "fair market value" (FMV) of the items that you receive. FMV is basically what you could actually sell them for if you did sell them. The list that you select products from, and the shipping document, do not establish the fair market value. If the company that sends the product advertises it for sale, you could use the advertised price as the FMV.

All of the items that you receive are taxable income, no matter how little the value is. There is no minimum amount for a single item or multiple items, that makes it taxable. You have to report all of the income and it is all taxable.

The tax that you will pay on your business income is not a fixed percentage. It's taxed at the same rates as any other income you have, such as from a job. The income tax rate will depend on your filing status and the amount of other income that you have. In addition to regular income tax, you have to pay self-employment tax on your net business income (after subtracting any business expenses). If your net business income is more than $432 you have to pay self-employment tax on your entire net business income, not just the amount over $400 or $432. The self-employment tax rate is approximately 14.13%.