Question Do you receive free goods and write reviews about them as a hobby?

[aquielisunari]

I know of someone who is receiving a LOT of free goods and they submit a review(a very strong suggestion)....Wait one, this sounds like spam to me but seriously, it isn't. They however do have to pay taxes on the items which have a Estimated Tax Value applied to them. Over the course of a month they have received about $3,000 worth of products to review but they are concerned about their tax burden come April. They will have to submit a 1099 in regards to their Hobby(other income). Is there some way they can get a rough idea the federal taxes they will have to pay come tax time? They just picked up a Oculus Quest All-in-one VR Gaming Headset – 128GB to review and they gets to keep the item. I mean REALLY?!!!

I am not jealous.

I understand I haven't given that much information because I don't know what to offer. Can you help me help them?

 

[COLGeek]

If they can estimate have much loot they will gather, they can use a calculator like the one linked below to get an idea of what is owed.

https://www.fool.com/retirement/self-employment-tax-calculator-how-much-will-i-owe.aspx

 

[Ralston18]

Hobby Income: Form 1040, Line 21 perhaps...

And the source of those goods/ rewards should file a 1099-Misc with a copy to your friend.

1099-Misc:

https://www.cpabr.com/avoid-penalti...about-1099-misc-rules-for-services-and-rents/

https://www.irs.gov/forms-pubs/about-form-1099-misc

And I will add that will be worthwhile to visit the IRS website and look at the appropriate forms and instructions.

For example:

https://www.irs.gov/pub/irs-prior/p525--2018.pdf

Other income is just another entry on the normal tax forms (1040) and the amount may or may not affect the actual end amount of Federal taxes. The calculator is one tool to help.

Another method is to just use last year's (2018) tax forms and plug in the expected income amount to determine what impact that additional income amount alone may have. May or may not, for example, cross some threshold value and change the tax bracket. Overall, other factors may come into play in 2019 and there could be no impact...

You have plenty of time to look into the matter.

Query the provider/source of the products. Ask them what they do with respect to reporting the products given for "review". Have they, for example, asked for a social security number or other personal information? Caution is warranted.

For the record. I am not an accountant nor an attorney and the above are only suggested readings and ideas - not actual accounting, financial, or tax advice. Meet with a professional for such advice.

 

[popatim]

He could sell the stuff he does not wish to keep to offset his tax liability.