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Okay so maybe this goes into the no good deed goes unpunished folder. But a tax question for the FW crowd.

I have an Amazon Associate store that I made a long time ago in my blogging days. In the last few years I started using it as a way to get CashBack for my own Amazon orders. More recently I have offered to let my friends also use the link with the promise that I would give them any CashBack they get from their orders. This would help us all as we would get into the higher tiers of referral credit. Well it would seem in 2012 we tripped the magic 600$ limit and I got a 1099-MISC.

So my question is should I just pay the tax and enter the income as a hobby? Ignore the 1099 since it was not income but instead CashBack? Put it as a business expense and enter all the money I gave to my friends as "commission"? Something else.

On a side note, has anyone put something like this in their kids name so that they could get income at a very young age? For opening a ROTHIRA

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Amazon has no idea what your cost basis is for each item you sold through your seller account. You could even be losing... (more)

mactv (Apr. 02, 2013 @ 11:41p) |

Thanks for the reply...do you by any chance have a source that explains that that is the reason? I have to say that does... (more)

pengar (Apr. 02, 2013 @ 11:51p) |

Perhaps this will make it clearer.

When you sell something on Amazon - some other person/entity is actually paying you, A... (more)

mactv (Apr. 03, 2013 @ 3:18p) |

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I would be shocked if you can just choose to ignore the 1099 and choose to classify it as "CashBack"

What does 1099 income have to do with opening a roth ira? You still need a W2.

Don't ignore it. It's not worth the hassle of trying to explain it as CashBack(as you're not supposed to be doing it anyway). Just tell your friends you have to take taxes out in the future.

MacKenzieIII said:   Ignore the 1099 since it was not income but instead CashBack?It is not Cash Back. It is referral commission.

Ok okay ignoring it is the wrong answer. It is just a pain since all of the money is either a "commission" on items I paid for at Amazon or items my friends paid for and they had their "commission" passed on to them. In the same way fatwallet sends its commissions to us. And I doubt that fatwallet sends out a lot of 1099s.

MacKenzieIII said:   or items my friends paid for and they had their "commission" passed on to them. In the same way fatwallet sends its commissions to us
I would imagine that fatwallet pays income tax on the referral commissions generated by their Cash Back shoppers

MacKenzieIII said:   And I doubt that fatwallet sends out a lot of 1099sebates seems to operate similarly to fatwallet's CashBack and has sent out 1099s in the past

https://affiliate-program.amazon.com/gp/associates/help/t15/a6

What is Amazon's policy for Associates placing orders for themselves?You may not purchase products during sessions initiated through your own Associates links and will not receive referral fees for such orders. This includes orders for customers, orders on behalf of customers, and orders for products to be used by you, your friends, your relatives, or your associates in any manner.

Yes you have to pay taxes on it

Yes, you owe taxes on the commission income. And, just to be clear, you have always owed taxes on this income, even in previous years. It's just that the IRS didn't have an easy way to enforce this on you until you triggered the 1099.

Wow. Just when I thought you could only time-travel to the future, this thread sent me 10 years back

May be dumb question but....
when receiving money from Amazon Payments for goods and services - will I be 1099'd?

lorymills1 said:   May be dumb question but....
when receiving money from Amazon Payments for goods and services - will I be 1099'd?

I haven't yet. I assumed that AP used the 200 transactions AND $20k limit per year as the basis for reporting, which obviously one wouldn't hit using CCs for payments due to their monthly limits.

Okay yes I agree must report. So a business and try and think up deductions since I payed most of that 600 out? Or hobby income and just move on with life?

Also any pitfalls of moving this into my daughters name? I think as she got older it would be easy for her to keep track of who bought what and pay it out. Maybe even a good learning experience. And I like the idea of getting her earned income at 5 y/o.

MacKenzieIII said:   Okay yes I agree must report. So a business and try and think up deductions since I payed most of that 600 out? Or hobby income and just move on with life?

example:
Schedule c revenue: $600
commissions expense, refunds, doesn't matter too much what you call it: $500 (whatever you paid out)
Taxable income: $100

taxmantoo said:   MacKenzieIII said:   Okay yes I agree must report. So a business and try and think up deductions since I payed most of that 600 out? Or hobby income and just move on with life?

example:
Schedule c revenue: $600
commissions expense, refunds, doesn't matter too much what you call it: $500 (whatever you paid out)
Taxable income: $100


If I do that do I need to then issue 1099s to those people who I paid?

MacKenzieIII said:   taxmantoo said:   MacKenzieIII said:   Okay yes I agree must report. So a business and try and think up deductions since I payed most of that 600 out? Or hobby income and just move on with life?

example:
Schedule c revenue: $600
commissions expense, refunds, doesn't matter too much what you call it: $500 (whatever you paid out)
Taxable income: $100


If I do that do I need to then issue 1099s to those people who I paid?


http://lmgtfy.com/?q=who+needs+to+issue+a+1099

taxmantoo said:   example:
Schedule c revenue: $600
commissions expense, refunds, doesn't matter too much what you call it: $500 (whatever you paid out)
Taxable income: $100
And who pays the taxes on the remaining $500 of 1099-MISC income ?

xoneinax said:   And who pays the taxes on the remaining $500 of 1099-MISC income ?

No one. If I give your business $50,000.00 and issue you a 1099 and you claim that $50,000 income and a $60,000 business loss no one pay taxes on any of that 1099.

...and Amazon finds this article and asked for its commissions back paid to you for items shipped to any of your addresses....


I can just see the argument to the IRS, it's not income because it Cash Back fraud...see I clearly don't owe taxes.


I would suppose if that account was owned by a corp or perhaps LLC. They would owe the taxes not you and you'd be ok....

vipercon said:   xoneinax said:   And who pays the taxes on the remaining $500 of 1099-MISC income ?
No one. If I give your business $50,000.00 and issue you a 1099 and you claim that $50,000 income and a $60,000 business loss no one pay taxes on any of that 1099.
What does your IF have to do with the OP ?

I got a 1099-MISC from Mr. Rebates in 2010 for affiliate rebates over $600. I reported it on Line 21 "other income" and the IRS sent me a notice that they moved it to my Sch C instead and charged me self employment taxes on it. I am not convinced it should be on a Sch C, but it was easier just to pay the small bill that waste my time fighting it.

Regardless, a 1099 means the IRS WILL know you received this and WILL expect you to pay the tax. If you ignore it, expect a correspondence audit notification adding it to your return.

MikeR397 said:   Regardless, a 1099 means the IRS WILL know you received this and WILL expect you to pay the tax. If you ignore it, expect a correspondence audit notification adding it to your return.

It's not that they expect you to pay taxes on it, it's that they expect it to be accounted for on your tax return.

Hi,
I have a question about Amazon Associates 1099 MISC.

I'm still waiting for my 1099 and thought I'd ask question here.
Does the commission you earn appear on Box 7?
Also does anyone know the Amazon's Federal ID number that appear on the 1099?

Dying to file my tax but somehow Amazon has not sent me 1099 yet.

MikeR397 said:   I got a 1099-MISC from Mr. Rebates in 2010 for affiliate rebates over $600. I reported it on Line 21 "other income" and the IRS sent me a notice that they moved it to my Sch C instead and charged me self employment taxes on it. I am not convinced it should be on a Sch C, but it was easier just to pay the small bill that waste my time fighting it.

Regardless, a 1099 means the IRS WILL know you received this and WILL expect you to pay the tax. If you ignore it, expect a correspondence audit notification adding it to your return.


I think that if you attached Schedule SE and the SE taxes on your 1040, you would have been fine.

banefool said:   Hi,
I have a question about Amazon Associates 1099 MISC.

I'm still waiting for my 1099 and thought I'd ask question here.
Does the commission you earn appear on Box 7?
Also does anyone know the Amazon's Federal ID number that appear on the 1099?

Dying to file my tax but somehow Amazon has not sent me 1099 yet.


Sorry to be quoting my own post but any kind soul could answer my Q?
I'm dying to file my tax right now but I am unable b/c my 1099 from Amazon is lost and I have to wait till March to get a replacement.
If someone could give me the Amazon's FIN and confirm the amount you earned through Amazon Associates appear in Box 7 or elsewhere then I would be eternally grateful.

Thanks in advance.

dbond79 said:   lorymills1 said:   May be dumb question but....
when receiving money from Amazon Payments for goods and services - will I be 1099'd?

I haven't yet. I assumed that AP used the 200 transactions AND $20k limit per year as the basis for reporting, which obviously one wouldn't hit using CCs for payments due to their monthly limits.


I'm curious. I received a 1099 from Amazon for what I believe was my Amazon associates / referral links. Someone mentioned earlier a $600 limit before Amazon sends out 1099's for this. I made a little over that (even though I received the "payouts" as an Amazon gift card), so I received a 1099. Makes sense so far.

However I also am an Amazon seller and sold quite a bit more than that (but under $20k). I didn't receive a 1099 for my Amazon seller account's sales.

Why would the limit to get a 1099 be $600+ for Amazon associates, but $20k+ for Amazon sellers?

pengar said:   Why would the limit to get a 1099 be $600+ for Amazon associates, but $20k+ for Amazon sellers?

Amazon has no idea what your cost basis is for each item you sold through your seller account. You could even be losing money with your seller account.

But with referral link revenue - they know that it technically didn't cost you anything - even if the link was on a web site you pay hosting for.

Thanks for the reply...do you by any chance have a source that explains that that is the reason? I have to say that doesn't seem to make sense to me. Why would it matter if Amazon knows what your profit was? Income and your expenses are separate. Like with PayPal, your fees (even payment processing fees) aren't figured in to the 1099

Either way that still wouldn't really explain why the limit is lower for Amazon associates referrals?

I don't mean to be argumentative, but it sounds like that is just your opinion and not necessarily based on facts. Did you read that anywhere?

Perhaps this will make it clearer.

When you sell something on Amazon - some other person/entity is actually paying you, Amazon is just the conduit.

But when you generate link revenue with Associates, Amazon is the one paying you.



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