Tax liability on income from online surveys?

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sss2009
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Tax liability on income from online surveys?

Post by sss2009 » Thu Apr 29, 2010 9:25 am

I tried to search an answer on this forum but could not locate one.

Questions is, I get lots of offers to participate in online surveys. The compensations offered are sometimes in check or gift cards etc. Sometimes in small print they write "the participants are liable for taxes".

So what is the limit or requirement to report this kind of income. Does it make any difference if the income is in form of Cash/Check as opposed to Gift card?

Appreciate your response.

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BlueEars
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Post by BlueEars » Thu Apr 29, 2010 9:33 am

I'm no tax expert but you probably should report this as income if you want extremely correct. Personally this strikes me as so far into the noise it's not worth worrying about. Unless you're making a business of finding many, many surveys to fill out. I never do the surveys myself unless there's a big payoff and an entry into a chance to win something will not entice me.

rwwoods
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Post by rwwoods » Thu Apr 29, 2010 10:52 am

The IRS will tell you that all income must be reported. There is a line on form 1040 for reporting other income.
"I'm not so much concerned about the return on my money as the return of my money" - Will Rogers

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Bob B
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Post by Bob B » Thu Apr 29, 2010 12:42 pm

Will the IRS even know about the income if the company doesn't send you a 1099-MISC? That would be my gauge for reporting it or not.
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Random Poster
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Post by Random Poster » Thu Apr 29, 2010 12:45 pm

Query whether the income received is truly "income" or is instead a "gift."

As an aside, I once was a participant in the Arbitron rating service. Arbitron was quite clear in stating that the monthly payments (usually in the $50 to $100 range) were tax-free until you received $600 or more in total for the year. For the year in which I participated, Arbitron did not send me a 1099. Nor did they ever ask for my SSN.

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HueyLD
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Re: Tax liability on income from online surveys?

Post by HueyLD » Thu Apr 29, 2010 1:09 pm

sss2009 wrote:So what is the limit or requirement to report this kind of income. Does it make any difference if the income is in form of Cash/Check as opposed to Gift card?
Technically, you are supposed to report all such income items as long as they are not specifically exempted from taxation.

In practicality, you report them after you receive applicable 1099's.

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ObliviousInvestor
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Post by ObliviousInvestor » Thu Apr 29, 2010 1:33 pm

Bob B wrote:Will the IRS even know about the income if the company doesn't send you a 1099-MISC? That would be my gauge for reporting it or not.
Isn't this just the same as saying "tax fraud is OK if you don't get caught"?
Random Poster wrote:Query whether the income received is truly "income" or is instead a "gift."

As an aside, I once was a participant in the Arbitron rating service. Arbitron was quite clear in stating that the monthly payments (usually in the $50 to $100 range) were tax-free until you received $600 or more in total for the year. For the year in which I participated, Arbitron did not send me a 1099. Nor did they ever ask for my SSN.
If it was provided in exchange for services, it's not a gift. It's income.

Regarding the $600 limit, that's incorrect. $600 is the limit at which they have to send you a 1099. It has nothing to do with whether or not you have to report the income.
Mike Piper, author/blogger

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BruceM
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Post by BruceM » Thu Apr 29, 2010 1:45 pm

rwwoods wrote:The IRS will tell you that all income must be reported. There is a line on form 1040 for reporting other income.
This is generally true, but there are some exceptions, such as

- qualified Roth withdrawals
- Gifts from family or friends (although they may have to file a gift tax return)
- Rents charged on a first or second home if rented fewer than 15 days
- certain employee benefits or reimbursements
- VA payments
- Child support
there are several others

Where it gets interesting are the kinds of 'miscellaneous' sources of income that must be reported on line 21 of your 1040, to include income received through

- games, prizes and gambling winnings
- theft, embezzelment or extortion
- the balance due on a cancelled debt
- gain on the sale of personal items, however small
- Hobby income
- Bribes
- Found money or property

BruceM
Last edited by BruceM on Thu Apr 29, 2010 6:32 pm, edited 1 time in total.

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Bob B
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Post by Bob B » Thu Apr 29, 2010 3:29 pm

ObliviousInvestor wrote:
Bob B wrote:Will the IRS even know about the income if the company doesn't send you a 1099-MISC? That would be my gauge for reporting it or not.
Isn't this just the same as saying "tax fraud is OK if you don't get caught"?
No. If the survey company thought the money represented income to me then they should issue a 1099-MISC. Absent the 1099, then maybe they considered the money a gift for helping them out. That's what I was thinking anyway. But, I see your point too.
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ObliviousInvestor
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Post by ObliviousInvestor » Thu Apr 29, 2010 3:44 pm

Bob B wrote:
ObliviousInvestor wrote:
Bob B wrote:Will the IRS even know about the income if the company doesn't send you a 1099-MISC? That would be my gauge for reporting it or not.
Isn't this just the same as saying "tax fraud is OK if you don't get caught"?
No. If the survey company thought the money represented income to me then they should issue a 1099-MISC. Absent the 1099, then maybe they considered the money a gift for helping them out. That's what I was thinking anyway. But, I see your point too.
Just in case anybody isn't clear: Whether or not they sent you a 1099 has nothing to do with whether or not you have to report it.
Mike Piper, author/blogger

MarkNYC
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Post by MarkNYC » Thu Apr 29, 2010 3:48 pm

BruceM wrote:
rwwoods wrote:The IRS will tell you that all income must be reported. There is a line on form 1040 for reporting other income.
This is generally true, but there are some exceptions, such as

- Rents charged on a second home if rented fewer than 14 days
- Income on up to 2 rooms rented from your personal residence

BruceM
Bruce - I believe the less-than-14 day rental exclusion is not limited to a second home, but applies also to a principal residence. Let me know if you disagree with this.

I've never heard of an income exclusion for rental income on up to 2 rooms of a personal residence. Can you provide a source in the code or regs for this exclusion?

KyleAAA
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Post by KyleAAA » Thu Apr 29, 2010 3:54 pm

All income is taxable, even non-cash income.

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FrugalInvestor
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Post by FrugalInvestor » Thu Apr 29, 2010 5:43 pm

KyleAAA wrote:All income is taxable, even non-cash income.
I believe the IRS has ruled that airline miles and credit card "points" are not income so long as you have not provided "information" in order to receive them.

This would also indicate to me that perhaps the renumeration for survey "information" you provide is technically taxable.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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BruceM
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Post by BruceM » Thu Apr 29, 2010 6:50 pm

MarkNYC wrote: Bruce - I believe the less-than-14 day rental exclusion is not limited to a second home, but applies also to a principal residence. Let me know if you disagree with this.
Yes, it can also be your primary home, although this is unusual unless you are traveling for most of the year...although certainly possible.
MarkNYC wrote:I've never heard of an income exclusion for rental income on up to 2 rooms of a personal residence. Can you provide a source in the code or regs for this exclusion?
It depends on the 'intent' of the homeowner, but my reference was to 'cost sharing' the homeowner's costs. The IRS came out with a rulling some time ago that under this arrangement, the homeowner did not have to include the cost-shairing as income. However, if a room is advertised and rented to anyone, then the IRS would see this as rental income, even if its only one room out of an owner-occupied residence. Sorry for the confusion....I've taken this out of the original post.

BruceM

MarkNYC
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Post by MarkNYC » Thu Apr 29, 2010 8:34 pm

BruceM wrote:
MarkNYC wrote: Bruce - I believe the less-than-14 day rental exclusion is not limited to a second home, but applies also to a principal residence. Let me know if you disagree with this.
Yes, it can also be your primary home, although this is unusual unless you are traveling for most of the year...although certainly possible.

BruceM
Actually, the homeowner would not have to be travelling for most of the year, only for the 13 or fewer days that the house was rented. I believe it's common at PGA tour events for people who own homes close to the golf course to rent the home for the week to players who prefer a house to a hotel room. The homeowner either stays with friends or neighbors for the week or travels that week (with little fear of tenant damage) and pockets several thousand dollars of rental income tax free.

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Bob B
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Post by Bob B » Thu Apr 29, 2010 8:38 pm

ObliviousInvestor wrote:
Just in case anybody isn't clear: Whether or not they sent you a 1099 has nothing to do with whether or not you have to report it.
Message received. Doesn't matter. I think this is a better idea.

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Febreze
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Post by Febreze » Sat May 01, 2010 9:46 pm

Bob B wrote:Will the IRS even know about the income if the company doesn't send you a 1099-MISC? That would be my gauge for reporting it or not.
The cashier at the grocery store won't know about items if you put them in your pocket, and thus you won't have to pay for them when they ring you up. I guess as long as you put MOST of the items you are taking in your cart, and pay for those, then it's not stealing, right?

Febreze
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Post by Febreze » Sat May 01, 2010 9:51 pm

FrugalInvestor wrote: I believe the IRS has ruled that airline miles and credit card "points" are not income so long as you have not provided "information" in order to receive them.

This would also indicate to me that perhaps the renumeration for survey "information" you provide is technically taxable.
The reason why credit card points and airline miles are not taxable income has nothing to do with information exchange. In fact, I am perplexed what you mean by "providing information in order to receive them."

The reason why CC points are not-taxable is that the IRS has ruled that these rewards are considered an adjustment to the cost basis of the purchase price. Thus if you get 1% rewards on a $100 purchase, and receive a $1 check in the mail, the $1 is not income, it is a discount on the $100 purchase.

Technically this means that if you are itemizing that purchase for tax purposes, you must itemize the adjusted price of $99, and not the $100 price.

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