Product rebate reporting requirements for personal taxes

[Jdegezelle]

I recently starting a side gig for a product research and feedback company. The process is this: I buy a product from Amazon that the company specificies. After I purchase the product, the company sends matching purchase price funds to my PayPal account. So I am getting a 100% on all purchases I make. I use the product and provide feedback to the company. I am wondering if I need to report any of this information on my taxes? Do i need to claim the product value as income on my taxes? Do i count the money they refund me as income on my taxes?

[pk]

Yes to all of the above. More specifically, you report your gross & expenses on Schedule-C.  Your gross income is everything you get from  this "product research and feedback" company. Your expenses are monies you spend in acquiring the products for review and any other expenses associated with this income.  Note that the net income above $400 is also subject to 15.3%  SECA ( Self-Employment Tax, equivalent to the FICA that wages earners pay ).  And yes you have to report all of this on your Federal and State taxes.

Good Luck

[MCC15266]

This time of year already again! I also participate in this kind of testing, however I am only receive payment for the value of the item excluding tax/fees. Would I still need to file the amount even though I am paying the sales taxes on the items purchased? 

[MarilynG1]

@MCC15266  Yes, you could report this as a Business on Schedule C.  Your 'Income' is the amount of payment you receive (save documentation) and your 'Expenses' is the amount you paid for the products plus taxes/fees.

This would give you a Business Loss every year (unless you have other income for this business) so could eventually attract IRS attention. 

Click this link for a discussion on determining whether you are operating as a Business or Hobby?