Don’t Bleed Out Yet: IRS Thinks Your Plasma is Taxable!
As if paying taxes isn’t already frustrating enough, now the IRS thinks they’re entitled to a portion of your bodily fluids. That’s right, folks, it turns out that if you’re selling plasma, the IRS considers that taxable income. But don’t worry, we’ve got the scoop on what that means for you and how to stay on the right side of the law (and your bank account).
What is Plasma and Why Are People Selling It?
For those of you who might not be familiar, plasma is the liquid component of blood that carries cells and nutrients throughout the body. It’s also chock-full of antibodies that can be used to help people with certain medical conditions. Because of its valuable medical properties, plasma is in high demand, and many people choose to donate or sell their plasma to make a little cash on the side.
The IRS Wants Its Cut
While selling plasma might seem like a harmless way to make some extra money, the IRS sees it a little differently. According to IRS Notice 2005-80, income derived from selling plasma is considered taxable, just like any other type of income. This means that if you’re making money from selling plasma, you’re required to report that income on your tax return and pay any applicable taxes.
What Does This Mean For You?
The good news is that if you’re only selling plasma occasionally and you’re not making a significant amount of money, you might not have to worry too much about taxes. According to the IRS, if you make less than $600 per year from selling plasma, you don’t have to report that income on your tax return.
However, if you’re making more than $600 per year from selling plasma, you’ll need to report that income to the IRS. This might not be the news you were hoping for, but it’s important to be honest and upfront when it comes to your taxes.
How to Report Plasma Income on Your Tax Return
If you’re making more than $600 per year from selling plasma, you’ll need to report that income on your tax return using Schedule C (Form 1040), which is used to report profits or losses from a business.
When filling out Schedule C, you’ll need to provide information about your plasma-selling activities, including how much money you made and any expenses you incurred while selling plasma. You’ll also need to pay self-employment tax on your plasma income, which includes both Social Security and Medicare taxes.
Deductions You Might Be Eligible For
The good news is that if you’re making money from selling plasma, you might be eligible for certain tax deductions that can help reduce your overall tax bill.
For example, if you have a dedicated space in your home where you sell plasma, you might be eligible to deduct a portion of your rent or mortgage, utilities, and other expenses related to that space. You might also be eligible to deduct expenses related to the equipment and supplies you use to sell plasma, such as needles, gloves, and disinfectant.
Always Document Everything
Whether you’re making a little money on the side from selling plasma or you’re running a full-blown plasma-selling business, it’s important to keep meticulous records of your income and expenses. This will not only help you stay organized but it will also make tax time a lot easier and less stressful.
Make sure to keep track of every sale you make, including the date, amount, and any expenses you incurred. You should also keep track of any payments you receive, whether they’re in cash, check, or via electronic transfer. And make sure to hold onto any receipts or invoices related to your plasma-selling activities.
The Bottom Line
Selling plasma can be a great way to make some extra cash, but it’s important to remember that any income you make from the sale of plasma is subject to taxes. While this might be a bit of a downer, being honest and upfront with your taxes is always the best policy.
Just remember to keep meticulous records, report your plasma income on your tax return, and consider taking advantage of any deductions you might be eligible for. With a little bit of effort, you can stay on the right side of the law (and your bank account) when it comes to selling plasma.
Table: Plasma-Selling Income Tax Breakdown
|Income||Self-Employment Tax||Federal Income Tax|
Note: These amounts are estimates and should not be used as a substitute for professional tax advice.
Don’t Forget These Deductions
When it comes to selling plasma (or any type of self-employment income), there are a number of deductions you might be eligible for. Here are some of the most common deductions to consider:
Home Office Expenses
If you have a dedicated space in your home where you sell plasma, you might be able to deduct a portion of your rent or mortgage, utilities, and other expenses related to that space.
Equipment and Supplies
You might also be eligible to deduct expenses related to the equipment and supplies you use to sell plasma, such as needles, gloves, and disinfectant.
If you need to drive to a plasma donation center, you might be able to deduct your mileage, as well as any tolls or parking fees you incur.
Marketing and Advertising Expenses
If you’re running a full-blown plasma-selling business, you might be able to deduct expenses related to marketing and advertising, such as business cards, flyers, and online ads.
Selling plasma might not seem like a huge money-making venture, but when it comes to taxes, every little bit counts. Be sure to keep meticulous records, report your plasma income on your tax return, and take advantage of any deductions you might be eligible for.
By taking these steps, you can keep your plasma-selling activities above board and avoid any unwanted attention from the IRS. And who knows, maybe you’ll even have enough money left over to buy yourself a nice steak dinner (just make sure to report that as income too).
- IRS Notice 2005-80: https://www.irs.gov/pub/irs-drop/n-05-80.pdf