The Pagan Mom Blog

Maybe I am being too cranky, but I am tired of people still blogging complaints about the guidelines the FTC has imposed on people doing endorsements.  I can understand it after the initial imposing of said guidelines but now it’s just a dead horse. So can we please quit complaining? Seriously?

And too I am looking at this with the accountant’s mind. See the thing is, people seem to think that reviewing products and keeping said products are “free”. The reality is it’s not. First off someone is giving you something in exchange for a service. Income is not just money but the fair market value of anything you receive in exchange for a service. If you don’t do the review, the company more or less is going to want the product back in the same condition it was sent in or the cost of the item. Absolutely nothing in this world is “free”, it costs someone something. If a company sends you an item that they sell for $40, they lose that sale. Assuming a 50% markup it costs them $20 plus shipping costs and then the other $20 lost in sales. Yea, it’s free to you but they are paying for it. And if you review that item they have paid you with that item to do the review.

Now I know some are going to say, “I don’t review that much”. No, some people don’t and there are some people who set out to make it a “career”. However, if you do reviews you should be reporting the fair market value (retail value in this case) as your income. If you do one review a month for items at about $40 a pop, that is $480 in income. May not seem like alot but it can put you in a new tax bracket depending on about 100 different factors (kids, wages, annuities, day care expenses,standard deductions, itemizing deductions, etc etc). Now with FTC guidelines the IRS is going to be looking at bloggers and work at home mom incomes even more. Even moreso now, working from home will become a red flag for auditors to review your return more carefully. This isn’t to scare you, this is just the truth. And don’t get into the mentality that the IRS is going to go after large corporations. First off small business and what I call Schedule C’rs (work from home people) make up the larger portion of businesses in the country. And who do you think will be easier to audit? Yep, the small business. Larger corporations take more amount of time to comb through everything. The IRS is probably going to go for what is easier and less time consuming.

Lastly, I have to say you should be VERY careful about announcing on your blog or twitter that you won’t be including the info on your return. I have already witnessed this once…dangerous stuff. The IRS offers rewards for people reporting others who are committing tax fraud (ie: not claiming all sources of income). And announcing it on your blog or twitter can make it very easy to locate you. Nothing is hidden well on the internet!