Just when you thought you had a foolproof way of making money the easy way, you discover you may have to pay taxes on your paid survey income. But wait a minute. Do you? The question of what you do, and don’t, have to pay in taxes is an age-old one, that seems to have reared its ugly head into the paid survey world.
So, Do You Need to Pay Taxes on Your Paid Survey Income?
That’s a valid question. And with any valid question, you won’t find an easy answer. But here’s the closest you’re going to get:
1. Let’s file rule #1 under “better to be safe than sorry.” The IRS requires us all to claim every itsy-bitsy piece of income we make over the year, regardless of the source. You know that five bucks you got for helping your friend move ( some friend!)? The IRS’s take on that is you have to claim it.
With that understanding, the answer you’ll get from the IRS is that YES, you have to claim your paid survey income, which, in turn, means you pay taxes on it.
2. Let’s call rule #2 the “not-so-safe, but more regularly used” approach. This approach suggests one of two things, both based on how much you make per paid survey. The first is that if you get paid more than $99 on a survey, then you have to report it as taxable.
The second is if you get paid more than $600 by a survey panel in one year, then that panel will send you a 1099 tax form, and you have to claim that income.
See Related: Ways to Take Surveys for Miles
Writing Off Expenses to Offset Taxes
Let’s say you end up claiming your income from paid surveys. Does that mean you’re going to lose a chunk of it? Not necessarily.
Paid survey panels will treat you as an independent contractor, and the beauty of this freelance lifestyle is you can write off many things, so long as they have to do with your work. Here are some potential write offs to help you offset your taxes:
● Part of your internet bill
● Computer equipment
● A portion of your electricity bill
● Office furniture
● Even, potentially, a portion of your rent/mortgage if you have a dedicated office
By writing off these expenses you can keep more of the money you made from your paid surveys.
See Related: Easy Ways to Get Free Google Play Money
The Nitty Gritty of Paid Survey Income Taxation
So, again, let’s assume you decide to claim your income, either because you’re being safe, or because you’ve made quite a lump sum (congrats!). How do you go about claiming this income?
For starters, these yearly earnings should be claimed under “other income” on your personal income taxes. But, if you want to take advantage of deductible expenses, you’ll want to fill out a Schedule C.
In fact, if you’ve made a fair amount of money with your paid surveys, then claim it under “other income,” and don’t fill out a Schedule C, the IRA will raise its eyebrow.
Another thing you must consider are 1099s. You should receive a 1099 from every paid survey company to cover your bases, and to look more like a legitimate independent contractor. If you don’t receive a 1099 from every company, contact them to have them send you one.
See Related: Epic ways to Get Free Cryptocurrency
If you make close to peanuts on your paid survey income, chances are you don’t have to pay taxes on them, unless you’re sent a 1099. If you make a good chunk of change, you may want to play it safe, claim the taxes as “other income,” and write off some expenses using Schedule C.
Either way, the goal is to keep as much as you can, because earning money from paid surveys is hard work, right?
This is a piece contributed by Spencer Mitchell, the blogger who runs SurveySpencer.com. After spending the last 3-years filling out paid surveys he decided to help others avoid the all-too-common scams and make the most from their paid survey income.
Thanks to his dedication to filling out surveys for money he’s been “lucky” enough to claim paid survey income in his 1099. He’s a part-time stay at home Dad that lives in Wyoming with his wife and two daughters.
Want to make real money with surveys?
Sign up with SurveyExpress and instantly receive a list of the highest paying survey sites.
We hate spam just as much as you