Q&A of the Week November 3, 2021

Question:

What income do social media influencers, personal product sales (Etsy), etc. have to pay taxes on? How is the income reported?

Answer:

In general, ALL income and "perks" including free products, trips, hotel rooms, etc. are taxable.

IRS Form 1099-NEC is used to report any payments remitted to you for $600 or more. For individual taxpayers, the most appropriate place to report 1099-NEC income is on Sch C, Form 1040.

The Sch C Form is also where you list business-related deductions, including applicable home office expenses and mileage.