Doing surveys is a great way to earn some extra cash – but do you have to pay taxes on the money you earn?
Many people who are looking to earn extra cash from home turn to online surveys. According to the newspaper The I, some people can earn an extra over $150 a month from doing paid surveys.
All this extra cash sounds great, considering how easy filling out a survey can be. But, how much of this extra dosh do you get to keep and how much of it will be taxed.
Well, the rules vary depending on where you live in the world and how much you have earned. For more information on online surveys and how they are taxed in the US, keep reading…
What Are Paid Online Surveys?
When companies need to gather customer information or data on a product or service, they survey a large group of people. Many companies don’t have the time to gather this information themselves so they outsource it to online survey companies.
These companies offer money and rewards to anyone who is willing to fill out these surveys. Each survey usually earns the participant between $0.25-$0.50, and they are allowed to cash out this money when they have completed $5 worth of surveys.
Companies usually pay for people to complete surveys because it means that they will get a lot more responses than if they didn’t.
Online survey topics can range widely. One survey you do maybe about how you spend your spare time and the next may be about what deodorant you use. The big survey companies will be employed by multiple research teams and will need to collect a large amount of data on a wide range of subjects.
The most important thing a survey company can do is make sure that they are getting the right group of people taking each survey. Paying people to do their surveys makes this easier.
To determine if a person is right for the survey, the participant will usually go through a profiling questionnaire. If they pass the questionnaire they will be asked to continue with the paid survey.
Many survey companies will also offer raffle tickets and chances to win large prizes to encourage participants to take part in more than one survey. If you have the time to complete enough surveys then it is possible to earn over $100 a month by filling out online surveys.
Some people’s opinions are worth more to companies than others. It is typically easier to make money from surveys if you live in the USA or the UK.
If you find yourself making a good amount of money from filling out these online surveys, are you going to be taxed on those earnings? Well, let’s look at how survey earnings are taxed in both the UK and the USA.
Tax Rules In The USA
If you live in the USA then you will be able to make more money than most through online surveys.
If you are planning to try and make money from online surveys then you should prepare yourself by brushing up on Federal Tax Laws.
No matter how much money you make, you should keep records of everything you get from online survey sites – this includes cash, vouchers, and products.
You will need to declare all your earnings on your tax reports at the end of the year. If you get free products then you should record how much they are worth as you will also need to claim against these with the IRS.
No matter how much you earn from surveys, we recommend that you declare all earnings and winnings to the IRS.
In the USA, any money you make from filling out surveys can be taxed, if your overall income goes over $10,000. There are no allowances for winnings, they are considered earnings.
So, if you earn over $10,000 before you include your survey income, or your survey income takes you over $10,000 a year in earnings, you will need to pay taxes on the survey income. How much you pay will depend on your overall taxable income and the tax band that you fall in.
If you earn more than $600 from one survey company, you may be required to fill in an extra form with your taxes called a W9.
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