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I am an Independent Avon Sales Representative needed tax related assistance.

I estimate that between now (Thanksgiving) and the end of the year, I may only bring in barely $100 in commission. I have heard contradicting information about filing taxes. I have been told that I may not need to claim it if it is under a certain amount, especially if I don't receive a 1099, I have been told I am responsible for State and Federal taxes, I am really confused. My husband and I are afraid that we may end up owing taxes.
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2 Replies
Hal_Al
Level 15

I am an Independent Avon Sales Representative needed tax related assistance.

It's not you, it's the great American tax system that is confusing. In your case there are several rules that add to the confusion. But, as answered by Rick 19744; all income is reportable and taxable, unless specifically exempt by law (e.g. VA benefits). There is no dollar amount threshold.
Most of the confusion, in your situation, comes from these two rules:
1. Businesses are required to issue a 1099-MISC if they pay a contract employee/subcontractor more than $600. This is frequently interpreted as meaning you don't have to file the income. That's not true. What it really means is you can probably get away with not reporting it because the IRS doesn't know about it, thru the regular tax document system (1099's).
2. You are not subject to self employment tax (SET) if you made less than $400. SET is how the the self employed (and that is what you are considered to be) pay their social security & medicare tax. The $100 you make is subject to income tax, but not SET. Since your amount is less than $400, you may report the income as misc. income, instead of Self employment, simplifying the reporting of the income. The "long form", form 1040 will still be required.

I am an Independent Avon Sales Representative needed tax related assistance.

All income must be reported unless there is a specific exclusion in the tax code.

Your income should be reported regardless of whether you receive a 1099.  You will report this on Schedule C.  Additionally, you will be able to take eligible expenses as deductions on this schedule as well.  

Even if you don't have any expenses, this $100 will not generate any significant tax liability.

See the attached instructions for this schedule:

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
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