I already asked this but I failed to be clear, so I'm trying again.
I have accrued reward points from MyPoints.com both for purchases (not counted as income by IRS)
and surveys (which IS counted as income).
Here is the full break down:
2019:
Points earned from PURCHASES: 46160 (Cash value if I had redeemed = $290.68)
Points earned from SURVEYS: 6251 (Cash value if I had redeemed = $39.36)
Points REDEEMED: 0
2020:
Points earned from PURCHASES: 15216 (Cash value if redeemed = $95.82)
Points earned from SURVEYS: 12705 (Cash value if redeemed = $80.01)
Points REDEEMED: 15880 ($100 PAYOUT to Paypal)
2021:
Points earned from PURCHASES: 0
Points earned from SURVEYS: 2186 (Cash value if redeemed = $13.77)
Points REDEEMED: 31760 ($200 PAYOUT to Paypal)
So, as you can see, I earned a lot of points that weren't redeemed until the next year or two
years later (plus I still have a lot of points that I still haven't redeemed yet). How on earth do I declare the portion of these payouts that were from surveys on my taxes?
Since in 2019 and 2020 combined I earned enough points just from purchases to cover the payouts so far ($300 total payouts, $375 total points value of purchase points accrued), can I just not declare this income at all for 2021? Then, in 2022 when I request more payouts that are essentially finally getting to the survey portion of my points balance, I will declare those payouts as income on my 2022 return?
As I understand it, even the taxable rewards points from my survey work isn't considered income in the year where I accrue it, but in the year where I RECEIVE PAYMENT (a payout) for it. If that's right, the problem is coming up with how to report the income just from the surveys. Hold it off until the end of the pile of accrued points? Or, try to figure the percentage of survey points vs purchase points? But if percentage, that percentage will change each year, but I don't get payouts until year(s) later!
Please help.
Thank you so much.
By the way, I have freelance writing income as well and I plan to declare any (if any this year) survey income on a separate schedule C as business income. So, I'll be over the $400 of self-employment income from any sources that doesn't require a tax return on its own.
