Client got into the business so she would get the discount on her own purchases. She does not sell to anyone else. She received a 1099. Trying to decide how to handle. She orders the product, company pays her a commission on her own purchase and then it gets reported on a 1099. So she is paying taxes on the commission of a personal item she uses?
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Yes. Commission is taxable income. COGS is 0 because she withdrew 100% for personal use.Originally posted by JenMO View Post
The question then becomes that she is really doing this for hobby NOT to make a profit. I think given the circumstances it could be reported on line 21 and not pay the SE tax!Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR -
technically it is not commissions. It is a discount on her purchases. But the companies usually issue 1099-Misc if the amount is over $600 which puts these people in this position.
Linda, EAComment
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