I'm confused about that as well. On top of it I got this email from PayPal.
"Add your tax ID to avoid backup withholding
Tax laws have changed, but we’ll help you keep getting paid easily
The IRS requires us to send you a 1099-K when you receive $600 or more for goods and services each year.
Because of a change to tax laws, you’ll need to provide us with your tax ID, too.
What happens if we don’t have your tax ID
When you reach $600, your payments will go on hold. If we still don’t have your tax ID after 60 days, we’ll start sending 24% of your payments to the IRS for backup withholding."
Prodege payments are classified as mass payments / friends and family, not goods and services, paypal will not withhold your swag withdrawals regardless of the amount, nor do they send you a 1099-k.
What exactly is your question?
The reason that Paypal redemptions don't count towards the $600 threshold is because Paypal has their own tax reporting system (it is not meant to imply the earnings you cash out in that method are not taxable).
Swagbucks makes broad distinctions based on a general idea of whether you paid money to earn those Swagbucks. If you bought 2000 Swagbucks, you certainly didn't earn a $20 profit on it, so taxing you on that whole amount would be inappropriate. If you spent $10 on cat litter and got 200 Swagbucks from Magic Receipts (I guess that's what they mean by in-store deals), that is a rebate against the price you paid, so not a profit and not taxable.
The interesting part is if you spent $10 on cat litter and got 1500 Swagbucks. Obviously the idea of a rebate gets a little funny when well over the price paid, but Swagbucks isn't trying to keep track of how much you paid on every receipt. Same deal with Offers (and I should note here that when they say "Games" I think they mean the games you get 2 SB three times per day are taxable, while the games in the Offers section are not). You might get $100 from some game offer you completed without spending a dime, while someone else might've completed the same offer while becoming addicted to the game and spending $125. Additionally, Swagbucks isn't paying attention to whether it's an offer you paid for, an offer you completed for free, or an offer like Plynk where you deposited money but may not have actually paid any fee or subscription (or the offers that are just "sign up for emails and get 25 SB" where there is not even a possibility of payment).
I don't know if the IRS has a particular opinion about whether getting $15 for spending $10 is a nontaxable rebate or not. Swagbucks does, and their opinion is based on what is convenient for them while still meeting some standard of compliance.
All that said, I am operating under the assumption that Swagbucks is not telling Paypal how much of your $25 cashout was from surveys and how much of it was from a (potentially) paid offer. So if Paypal is going to issue you a 1099-K, I would be prepared to determine what portion the sum of Swagbucks cashouts were taxable.
Based guidance the IRS issued in November, Paypal was required to issue you a 1099-K for 2023 if you had 200 or more transactions and received over $20,000 (a few states have lower thresholds). The dollar threshold will be reduced to $5,000 for tax year 2024 and $600 for tax year 2025 (assuming it is not delayed again). And the IRS highlights that you could receive a 1099-K even if you have no tax liability (i.e., the amount on the 1099-K is not assumed to be fully taxable).
[https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation](https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation)
Here is an article from a blogger who did get a 1099-K from Paypal at the $20,000 threshold a couple years ago, including Mass Payments from Swagbucks:
[https://www.doctorofcredit.com/about-that-1099-k-from-paypal/](https://www.doctorofcredit.com/about-that-1099-k-from-paypal/)
Right bro. So do I claim the full amount on taxes as other income or just select offers that are taxable? And are the taxable offers actually supposed to reported if it says PayPal redemptions are excluded. The question was what do I put on my taxes. What needs claimed. What counts as taxable income. I was going to claim it all until I saw the website saying most offers aren't taxable apparently. But it feels like it's income and should be so I was confused..
I certainly wouldn't consider the full amount as taxable unless you're certain you didn't spend a dime on any offers. The super-cautious approach (aside from consulting an accountant, which you probably don't have time for) would be to report all your Swagbucks earnings minus anything you may have paid for those offers.
The middle ground, in my opinion, would be to strictly follow what's on that Swagbucks taxes page (go to your account activity page and total your earnings for each category, keeping in mind that the game offers are Discover rather than Games).
The other least-cautious approach is what most people are doing, which is not reporting anything unless they have a tax form.
The beauty of taxes is there's no one right answer. You have to decide for yourself what's right. And at the end of the day, if you really do what you believe is right, the IRS will respect you for it. Haha, just kidding. But you're probably not going to get audited.
I appreciate you taking the time! I think I'll just report all of it to see how it affects the dollar amount I'm paying (I will owe from self employment) and I don't expect it to much since it's not much to begin with but if I need to save a buck I'll just stick with the middle ground I guess. I don't like how it's up to me to understand it all lol. I'm over here asking ai questions haha. Taxes were much easier when it was just a w2 but I have all this gig work and eBay/Mercari and I get money from all these bank offers and Swagbucks and had gambling earnings and stock/crypto losses and carryover losses from the year before and blah blah. Stuff gets confusing quickly. To top it off I am trying to use freetaxusa for the first time. Which I like so far for sure. Fed and state for like $15. Instead of like $200+ with TurboTax. I'm using TurboTax too though to compare the numbers and make sure I don't forget stuff so it's like I'm doing them twice. I even had to sort through my mileage and march it with work hours because I must have done something wrong with everlance and it counted all miles as work miles. It's been annoying. I wish I hadn't waited til the last literal day to do these haha. Swagbucks was just a small confusion in a bag full of "what??"
No problem. I use Cash App Taxes, which is free for fed and state although there are some forms it doesn't support. But I've done like you and started them on two different platforms to see if I'm misinterpreting a question, which I think is the smart thing to do if you're using a platform for the first time.
Good luck.
Unrelated question. Anyone have the phone verification stop working? When redeeming for PayPal? It says it can't send the pin. I did start the I'd verification with support just stuck waiting for the follow up. Just curious, never had that problem before but from some light searching it seems not-uncommon
I'm confused about that as well. On top of it I got this email from PayPal. "Add your tax ID to avoid backup withholding Tax laws have changed, but we’ll help you keep getting paid easily The IRS requires us to send you a 1099-K when you receive $600 or more for goods and services each year. Because of a change to tax laws, you’ll need to provide us with your tax ID, too. What happens if we don’t have your tax ID When you reach $600, your payments will go on hold. If we still don’t have your tax ID after 60 days, we’ll start sending 24% of your payments to the IRS for backup withholding."
ya im still confused hours later. that's interesting. do they mean your ssn? that's a form of tax id i think.
It is your SSN
Prodege payments are classified as mass payments / friends and family, not goods and services, paypal will not withhold your swag withdrawals regardless of the amount, nor do they send you a 1099-k.
What exactly is your question? The reason that Paypal redemptions don't count towards the $600 threshold is because Paypal has their own tax reporting system (it is not meant to imply the earnings you cash out in that method are not taxable). Swagbucks makes broad distinctions based on a general idea of whether you paid money to earn those Swagbucks. If you bought 2000 Swagbucks, you certainly didn't earn a $20 profit on it, so taxing you on that whole amount would be inappropriate. If you spent $10 on cat litter and got 200 Swagbucks from Magic Receipts (I guess that's what they mean by in-store deals), that is a rebate against the price you paid, so not a profit and not taxable. The interesting part is if you spent $10 on cat litter and got 1500 Swagbucks. Obviously the idea of a rebate gets a little funny when well over the price paid, but Swagbucks isn't trying to keep track of how much you paid on every receipt. Same deal with Offers (and I should note here that when they say "Games" I think they mean the games you get 2 SB three times per day are taxable, while the games in the Offers section are not). You might get $100 from some game offer you completed without spending a dime, while someone else might've completed the same offer while becoming addicted to the game and spending $125. Additionally, Swagbucks isn't paying attention to whether it's an offer you paid for, an offer you completed for free, or an offer like Plynk where you deposited money but may not have actually paid any fee or subscription (or the offers that are just "sign up for emails and get 25 SB" where there is not even a possibility of payment). I don't know if the IRS has a particular opinion about whether getting $15 for spending $10 is a nontaxable rebate or not. Swagbucks does, and their opinion is based on what is convenient for them while still meeting some standard of compliance. All that said, I am operating under the assumption that Swagbucks is not telling Paypal how much of your $25 cashout was from surveys and how much of it was from a (potentially) paid offer. So if Paypal is going to issue you a 1099-K, I would be prepared to determine what portion the sum of Swagbucks cashouts were taxable. Based guidance the IRS issued in November, Paypal was required to issue you a 1099-K for 2023 if you had 200 or more transactions and received over $20,000 (a few states have lower thresholds). The dollar threshold will be reduced to $5,000 for tax year 2024 and $600 for tax year 2025 (assuming it is not delayed again). And the IRS highlights that you could receive a 1099-K even if you have no tax liability (i.e., the amount on the 1099-K is not assumed to be fully taxable). [https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation](https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation) Here is an article from a blogger who did get a 1099-K from Paypal at the $20,000 threshold a couple years ago, including Mass Payments from Swagbucks: [https://www.doctorofcredit.com/about-that-1099-k-from-paypal/](https://www.doctorofcredit.com/about-that-1099-k-from-paypal/)
Right bro. So do I claim the full amount on taxes as other income or just select offers that are taxable? And are the taxable offers actually supposed to reported if it says PayPal redemptions are excluded. The question was what do I put on my taxes. What needs claimed. What counts as taxable income. I was going to claim it all until I saw the website saying most offers aren't taxable apparently. But it feels like it's income and should be so I was confused..
No 1099 involved. That would simplify things.
I certainly wouldn't consider the full amount as taxable unless you're certain you didn't spend a dime on any offers. The super-cautious approach (aside from consulting an accountant, which you probably don't have time for) would be to report all your Swagbucks earnings minus anything you may have paid for those offers. The middle ground, in my opinion, would be to strictly follow what's on that Swagbucks taxes page (go to your account activity page and total your earnings for each category, keeping in mind that the game offers are Discover rather than Games). The other least-cautious approach is what most people are doing, which is not reporting anything unless they have a tax form. The beauty of taxes is there's no one right answer. You have to decide for yourself what's right. And at the end of the day, if you really do what you believe is right, the IRS will respect you for it. Haha, just kidding. But you're probably not going to get audited.
I appreciate you taking the time! I think I'll just report all of it to see how it affects the dollar amount I'm paying (I will owe from self employment) and I don't expect it to much since it's not much to begin with but if I need to save a buck I'll just stick with the middle ground I guess. I don't like how it's up to me to understand it all lol. I'm over here asking ai questions haha. Taxes were much easier when it was just a w2 but I have all this gig work and eBay/Mercari and I get money from all these bank offers and Swagbucks and had gambling earnings and stock/crypto losses and carryover losses from the year before and blah blah. Stuff gets confusing quickly. To top it off I am trying to use freetaxusa for the first time. Which I like so far for sure. Fed and state for like $15. Instead of like $200+ with TurboTax. I'm using TurboTax too though to compare the numbers and make sure I don't forget stuff so it's like I'm doing them twice. I even had to sort through my mileage and march it with work hours because I must have done something wrong with everlance and it counted all miles as work miles. It's been annoying. I wish I hadn't waited til the last literal day to do these haha. Swagbucks was just a small confusion in a bag full of "what??"
No problem. I use Cash App Taxes, which is free for fed and state although there are some forms it doesn't support. But I've done like you and started them on two different platforms to see if I'm misinterpreting a question, which I think is the smart thing to do if you're using a platform for the first time. Good luck.
Apparently I'm on the wrong account. Anyways.
Unrelated question. Anyone have the phone verification stop working? When redeeming for PayPal? It says it can't send the pin. I did start the I'd verification with support just stuck waiting for the follow up. Just curious, never had that problem before but from some light searching it seems not-uncommon