Thanks to Momondealz for bringing us this informative post each week.
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at [email protected]
Do I have to pay taxes on an item sent by a company to review?
As far as products for review, the IRS requires you report the fair market value of the item. That being said, I would take one of the 2 aggressive positions:
1. A “de minimis” fringe benefit of the business (not feasible to track & report)
2. a barter transaction and your cost to review the item would be equal to the fair market value of the item so the net income would be 0. Unless the company providing the product issued a 1099-MISC for the fair market value of the product (and I don’t believe they ever will).
In my opinion filing a “de minimis” would be opening up a whole can of worms so I don’t think I would even report it.
*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.