I have a pretty unique situation. I refinanced my student loans with SoFi. They had a deal where I got $100 for each person I got to sign up (and be approved) under my link. I got enough people to sign up that got approved that they bumped me to $500 per sign up. All I do is have the referral link in the signature block of my profile for a few different blogs I participate in (like this one). I'm not going around trying to actually sell the service.
I ended up making $3500 this year doing just that! I put all of that money on my loan. I knew I would have to pay taxes on it come tax time but I didn't think it would count as self-employment. The 1099 they issued me has the income in box 7 instead of 3. I did some online reading and it seems the IRS is taking a hard stance and a good look at any income claimed as Misc/box 3 instead of self-employed box 7. I'd rather not trigger an audit. However, the IRS opinions on similar income situations are all over the place. There is one example where a bank gave customers a gift for referring a friend (which I feel is most analogous) and that was considered misc. Someone who repeatedly donated plasma, however, was considered box 7, SE.
I guess I include the link with the hopes of getting referrals, but I also include it because I truly am very happy with my refinance and I want other people to get away from the awful lenders I had previously been dealing with. I would probably still preach it even if I didn't get money for it. The purpose then seems to lean towards Misc. But, it seems like the IRS also looks at frequency and this is more than a one time payment.
I have no problem paying the SE taxes if I owe them. I just want to do this right and not pay them unless I do actually owe them. Any advice?
