Do I Have To Pay Tax On My Fiverr Income?

Fiverr IncomeThe income you earn on Fiverr is considered self-employment income. Fiverr income is taxable to the recipient. If you haven’t heard of Fiverr, it’s a website that allows its users to offer products and services starting at just $5. The choices are abundant, and many users have great things to say about the service. Fiverr earns its revenues by keeping 20% of the posted fees.

Fiverr is a great way to market your services and get some extra income doing something you’re good at. It’s also a great way to build your skills and maybe test different offerings.

Self-employment income means you are required to file Schedule C to report the income and possibly Schedule SE to calculate self-employment tax. There is no minimum amount needed for you to report your income on your tax return. You will not owe self-employment tax, however, until your net income reaches $400. Schedule C will allow you to deduct possible business expenses against your Fiverr revenue. For example, maybe you do cover design, and you pay for a stock photo subscription service. This service should be included as a deduction on Schedule C.

Depending on the amount of income you earn, it may also be a good idea to make quarterly estimates.

If you use Fiverr as a means to make some extra money  and receive a Form 1099 because of your Fiverr income, keep in mind this is the gross amount that you’ve earned. You will be able to deduct Fiverr’s fees from this amount to reduce your taxable income – along with other possible expenses, as mentioned previously.

On the flip side, if you use Fiverr for your business, you can deduct the cost of the gig so long as the expense is considered ordinary and necessary for your business.