Where do I enter Amazon.com referral fees

[chp11643]

I am retired. I have links to Amazon products on my website which go to specific products. if someone clicks on my link, and buys the product, I get a referral fee. Where do i enter this amount on my return? My TurboTax forms never seem to reflect this accurately.

[KrisD15]

Are you Self-Employed?

If not, enter the income as "Less Common Income".

It will be taxable, but you won't be liable for Self-Employment tax. 

 Go To the Wages & Income section

 Scroll down to the VERY LAST option "Less Common Income" and click Show more

On this new drop-down list scroll down to the VERY LAST option "Miscellaneous Income" and click START

Now scroll down to the VERY LAST option "Other reportable income" and click Start

Select YES on the "Any Other Taxable Income?" screen 

Type "Amazon Incentive Payments" (or some other description, but do try to use something the IRS will understand and use the same description year after year) and the amount 

The income will be on Schedule 1 and carry to your 1040 Line 8

According to the IRS:

"Kickbacks.

You must include kickbacks, side commissions, push money, or similar payments you receive in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity.

Example 37.

You sell cars and help arrange car insurance for buyers. Insurance brokers pay back part of their commissions to you for referring customers to them. You must include the kickbacks in your income.

Manufacturer incentive payments.

You must include as other income on Schedule 1 (Form 1040), line 8z (or Schedule C (Form 1040) if you're self-employed), incentive payments from a manufacturer that you receive as a salesperson. This is true whether you receive the payment directly from the manufacturer or through your employer.

Example 38.

You sell cars for an automobile dealership and receive incentive payments from the automobile manufacturer every time you sell a particular model of car. You report the incentive payments on Schedule 1 (Form 1040), line 8z."

Pub 525

[chp11643]

I have no idea if accepting this referral money makes me "self-employed". It is my website which generates the money through Amazon. Does that make me self-employed?

[LenaH]

Yes. For tax purposes, self-employment income includes any part-time businesses or "side work" performed in which you are in business for yourself, rather than another person. You are also considered self-employed if you engage in business-like activities where you intend to make a profit.

Your website, which generates money through Amazon, was created with the intent to make a profit. Therefore, you would be considered self-employed. 

In order to report your self-employment income in 2021, you will need to enter your gross earnings and expenses on your Schedule C. To access these fields in TurboTax, complete the following steps:

1. Open your return in TurboTax.
2. Search for Schedule C with the magnifying glass tool on the top of the page.
3. Select the Jump to Schedule C link in the search results.
4. Select Yes to the question Did you have any self-employment income or expenses? 
5. Follow the on-screen instructions to complete your Schedule C.

For additional information on being self-employed, please see Am I considered self-employed?.

@chp11643

[chp11643]

Thank you. An excellent response.