Tuesday, June 3, 2014

Do You Have to Pay Taxes on Plasma Donations?

Q: Do you have to pay taxes when donating plasma? CSL plasma pays $60 a week. I donate plasma every week. I donated plasma 52 times, (or once per week,) at $60 a pop. That means I earned $3120 just from plasma this year. If taxes take a third of that, that means I owe nearly $1000 extra on my taxes. I'm screwed! Do I have to report plasma donation as taxable income?

Answer: No, you don't have to report plasma donation income on your taxes. Most plasma centers won't even ask for your social security number. Plasma donation centers have to pay taxes on money made selling your plasma, however, under Rev. Rul. 78-145, 1978-1 C.B. 169.

Your plasma donation is actually considered a "non-cash gift." Here's what the IRS website says about gifts:

"Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. The contributions must be made to a qualified organization and not set aside for use by a specific person."

CSL plasma falls into this organization category. So not only do you not have to pay taxes on the plasma you donate, you can deduct your time and gas expenses on your taxes as a gift!

18 comments:

  1. You don't have to pay taxes on the plasma you donate, however, you have to pay taxes on the compensation ($60 per week) received for your time.

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    1. No you don't! I've been filing my donations for 3yrs and never paid taxes on the compensation. The amount in total for all donations is a tax write off!

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    2. No you don't! I've been filing my donations for 3yrs and never paid taxes on the compensation. The amount in total for all donations is a tax write off!

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    3. Just because you haven't claimed the income doesn't mean you're not supposed to.

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    4. "Anonymous" is right--the link you put above is for the organizations selling your plasma. This advice is for individuals: https://ttlc.intuit.com/questions/2342656-plasma-donation-as-taxable-income
      --Joe, CPA candidate

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  2. From the TurboTax website:

    Yes you are required to report this income. You enter that income (from your own records) "as if" you did receive a 1099-MISC. 

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    Replies
    1. But this statement from TurboTax is not an official statement from them, but just from a CPA user.

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  3. so if you made over 600 dollar are you supposed to report it?

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  4. $600 is the threshold for a payor to generate a 1099. Just because you received less than $600 (or didn't receive a 1099) doesn't mean you don't have income that is taxable. Similarly, banks don't have to generate a 1099 for interest if you received less than $10. That doesn't mean if you received $9 in interest that you aren't supposed to report it - it just means they don't face the administrative burden of generating a 1099. It is still income to you that is taxable.

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    1. I work for a large plasma donation company and we are not supposed to and can't generate 1099-MISC forms for donors. No matter if they earn $4,000 a year. It is because we are not allowed to pay anyone anything. We give a cash gift for the time taken to donate. The money is not taxable.

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    2. I work for a large plasma donation company and we are not supposed to and can't generate 1099-MISC forms for donors. No matter if they earn $4,000 a year. It is because we are not allowed to pay anyone anything. We give a cash gift for the time taken to donate. The money is not taxable.

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  5. I work for a bank, no you do not need to claim interest earned if you earned less than $10.

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    1. Oh really banker, so you are giving tax advise because you work in a bank? And you are WRONG!

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    2. Oh really banker, so you are giving tax advise because you work in a bank? And you are WRONG!

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  6. If it is taxable is it earned. IE say you make money only from plasma donation. Are you or are not an employee? If not an employee is this self employment. If either is true then this is Earned Income and you actually qualify to receive Earned Income Credit. Let's say you don't owe taxes on this money because you earned less than the minimum. You may be eligible for Money not in the form of a return on taxes paid because you don't owe any taxes paid and non were taken out but instead you will receive EIC money..

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  7. You are supposed to report amy earnings you make legally or otherwise. No you are not an employee and it is not considered a job. It gets filled under miscellaneous income under the 1099 A-C areas of your 1040 form. At the same time you can deduct time and travel (gas) from your taxes too

    ReplyDelete
    Replies
    1. If this huge plasma industry was actually paying people up to thousands of dollars a year, they would be REQUIRED to give a 1099-MISC to each one. They are not required to give those to donors and actually NO PLASMA COMPANY gives these out.
      It is not income. It's compensation for time or donation. Just like if you donated a kidney.

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  8. My husband and I are trying to refinance to add on to our home, so we are paying large payments on credit cards and trying not to use them. I thought why not donate plasma for some extra fun money. We have three kids in public school, I use our roads etc. so I don't quibble about paying our taxes. My question is this- if I get my check book out and make a donation of $3500 to united way I get to deduct that from my taxes and put into a lower tax bracket. However, if I get compensation for plasma and don't report it I stay in my tax bracket and pay taxes accordingly. Doesn't it even out in the wash?

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