How does amazon vine work for taxes?
I understand at the end of the year amazon will send you a 1099 but the information online is very slim. I seen some people say "it didn't effect my taxes" I heard "I wrote it as a deduction because it's a hobby" but all information is very slim so can someone who is an amazon vine member who has filed please tell me. Did it effect your taxes and in what way? It is its own tax part or does it just add to your income tax so if you got 10k of free stuff and make 20k a year do you now pay 30K of taxable income? I don't understand because what if you keep all the products and don't make any profit off of it? What if you donate it? Please let me know and only if you are a vine member and filed or know someone who has. Like I said the information online is VERY SLIM. I seen people been in the program for years so how do they do taxes?
- A HunchLv 71 month agoFavorite Answer
You will receive a 1099 for the value the products that you have received.
If you receive, $400 work of items, it will have almost no impact on your taxes.
if you receive, $10000 worth of items, it will increase your income $10000 and you will owe at a minimum $1530 in self employment taxes.
= that's a hefty amount for not having a $1 in real money to pay your taxes.
- Pepper, PhDLv 61 month ago
First, you need to understand that when Amazon gives you these items, it is income, it is no different than if they give you a check. That is why they issue you a 1099-MISC.
How it affects your taxes depends on your tax bracket. There are seven tax rates from 10% to 37%, depending on your income. So for $1,000 in vine income, you could pay anywhere from $100 to $370 in extra taxes.
The only way it won't affect your taxes is if your income, after deductions and credits, is so low you don't pay taxes. For example, if your total income including vine is $12,200 or below, you will not pay any taxes and the vine income would have no effect.
The person who said they deducted the income because it is a hobby is wrong. You cannot even deduct expenses from a hobby.
- mercedesLv 71 month ago
The 1099 states your gross sales. You deduct the cost of goods sold and other business expenses. If you don't, IRS will presume your expenses were zero and bill you accordingly. Claiming it's a hobby won't fly because selling stuff is not a hobby.
- JudyLv 71 month ago
The amount on the 1099 is taxable income to you. If you donate the product, the amount of deduction for a donation can't be more than what you paid for it, or zero. If these people got a 1099 but didn't show it as income, they'll be hearing from the IRS eventually.