With the rise of the gig economy and side hustles, more people are earning extra income outside of their regular 9-5 jobs. Selling tickets on sites like Ticketmaster has become a popular way to make some cash on the side. However, you may be wondering if you need to report this income to the IRS and pay taxes on it. Here’s what you need to know about reporting Ticketmaster sales and other requirements when earning side income.
The Requirement for Reporting Income
The IRS requires all U.S. citizens and residents to report all taxable income earned during the year. This includes not only income from your regular job, but also any side income from self-employment, investments, prizes and awards, and more. So if you earn extra cash selling tickets on sites like Ticketmaster, StubHub, Vivid Seats, or others, this does count as taxable income that needs to be reported.
Specifically, you must report this income as part of your self-employment income on Schedule C of IRS Form 1040. It should be included along with any other income you earn from side jobs or freelancing. The requirement to report income applies even if the company you use to facilitate sales, like Ticketmaster, does not send you a Form 1099-MISC/NEC summarizing your earnings.
Income Thresholds
You may be wondering – do I really need to report a few hundred or thousand dollars earned from small side income sources like ticket sales? The answer is yes. There is no income threshold under which you do not need to report earnings.
The IRS requires you to report ALL income, no matter how much or little. Even if it is just $500 you make reselling event tickets during the year, technically this still needs to be claimed. Of course, if your total earnings are very low, you may not end up owing any taxes after deductions. But the income does need to be reported.
Filing Thresholds
While there is no income threshold for reporting earnings, there are filing thresholds that determine whether you actually need to file a tax return. For 2023, the filing thresholds are:
- Single – $12,950
- Married filing jointly – $25,900
- Married filing separately – $5
- Head of household – $19,400
So if your total income from all sources, including your regular job and side earnings like Ticketmaster sales, falls under these thresholds, you typically do not need to file. However, you still need to report all income if the IRS requests it.
How Ticket Sales Get Reported
Any income you earn selling tickets needs to be reported on Schedule C of your Form 1040 tax return. Schedule C is used for reporting income and expenses from self-employment ventures. Here’s how it works:
Report Gross Income
You’ll first report the gross income earned from your ticket sales. This includes:
- The total ticket sale price collected from buyers
- Any service fees paid by buyers
Add up all the ticket sale transactions you completed during the year to calculate your gross income amount.
Deduct Expenses
You can then deduct any ordinary and necessary business expenses associated with your sales to reduce your net income. Potential deduction expenses include:
- Fees paid to Ticketmaster or other platforms
- Credit card processing fees
- Advertising costs to promote ticket sales
- Mileage to purchase or deliver tickets
Keep accurate records of any expenses you want to deduct. The remaining net income after deductions is what gets reported and is subject to income tax.
Pay Self-Employment Tax
Income earned from self-employment is also subject to self-employment (SE) tax, which includes Social Security and Medicare taxes. SE tax is assessed at a rate of 15.3% on your net earnings. This is in addition to income tax you’ll owe on the profits.
Do You Get a 1099 for Ticket Sales?
Companies like Ticketmaster, StubHub, Vivid Seats, and other large ticket sellers may send you a Form 1099 summarizing your sales if you meet certain criteria for the number of transactions and amount sold. Specifically, you should receive a 1099-NEC form if:
- You sold over $600 worth of tickets cumulatively during the year on their platform
- You had over 200 transactions during the year on their platform
For example, if you sold 50 tickets for $20 each over the year on StubHub for $1,000 total sales, you would likely receive a 1099-NEC from them, as this exceeds the $600 threshold.
However, if you only sold a handful of tickets for a few hundred dollars total, you likely will not receive a 1099. Still, even without receiving a 1099 form, you are required to report these earnings yourself.
1099-K
There is also a 1099-K form you may receive from third-party payment processors like PayPal if you have significant sales volume exceeding $20,000 and 200 transactions. But for small-scale ticket selling, you are unlikely to cross this very high threshold to get a 1099-K.
How to Report Earnings Without a 1099
To summarize your ticket sales income on your tax return, follow these steps:
- Add up your gross ticket sales for the year from all platforms.
- Calculate your total business expenses/deductions.
- Subtract expenses from gross sales to determine your net self-employment income.
- Report this net amount on Schedule C line 31.
- Use Schedule SE to calculate self-employment tax owed on 92.35% of your net income.
- Carry net income amount to Form 1040 line 8 to calculating total income tax due.
Be sure to keep your own detailed records about sales and expenses as you may not receive any tax forms. The income reporting remains the same whether you get a 1099 or not.
Maximizing Tax Deductions
To reduce the taxes owed on your Ticketmaster or other ticket sale profits, be sure to track and claim all allowable tax deductions for your expenses. Here are some costs to keep records for:
Expense | Details |
---|---|
Seller fees | Fees paid to Ticketmaster, StubHub, etc. for listing tickets |
Payment processing fees | Fees charged by payment systems like PayPal or Stripe |
Advertising | Online ads, flyers, etc. used to promote ticket sales |
Mileage | Miles driven to purchase or deliver tickets, at $0.625/mile for 2023 |
Home office | Portion of home used regularly for business, deduct actual expenses or $5/sq ft up to 300 sq ft |
Tracking expenses takes extra work but can really help reduce your tax bill. Every deduction you can claim improves your bottom line profit.
Special Considerations
Beyond the basics, here are some other things to keep in mind when reporting Ticketmaster or other ticket sales to the IRS:
Capital Gains
If you purchase tickets with the sole intent to resell them for a profit, the income may be considered capital gains instead of ordinary self-employment income. In this case, report sales on Schedule D instead of Schedule C.
Hobby vs. Business
If ticket resale is just a hobby instead of a for-profit business, report income as Other Income on Form 1040 instead of as business income. You cannot deduct hobby expenses.
Sales Tax
Check if you need to collect and remit sales tax on ticket transactions in your state. If so, you’ll need to register and regularly file sales tax returns.
Reseller Certification
Some states require special licensing or certification for ticket resellers. Be sure to check registration requirements to sell tickets legally in your area.
Penalty for Not Reporting
What happens if you don’t report your Ticketmaster earnings? The IRS treats failure to report income just as seriously as failure to pay taxes. If they find out about unreported income, you’ll likely face the following repercussions:
- Tax Bill – You’ll owe back taxes plus interest and penalties on unreported income
- Audit – Increased likelihood of the IRS auditing your return
- Fees – Failure to file penalties of 5% per month of unpaid taxes
- Prosecution – Criminal charges like tax evasion for intentional unreported income
The IRS has sophisticated data matching systems to identify unreported income from sources like Ticketmaster. It’s simply not worth the risk attempting to hide cash earnings. Always report all income accurately to stay compliant.
State Tax Requirements
In addition to reporting earnings on your federal tax return, you also need to consider state tax obligations. Some key points:
- You must report income in any state where you conducted ticket sales
- Most states have income tax filings separate from federal returns
- Self-employment tax still applies for Social Security/Medicare
- Some local areas also have city/county taxes
Determine which tax authorities you need to report to based on where your sales activity took place. This is especially important for online sales which span many jurisdictions.
Reciprocal Agreements
Some neighboring states have reciprocal tax agreements allowing you to only file in your state of residence, even for out of state income. For example, Maryland and Virginia have a reciprocal agreement for income tax.
Allocating Income
If you conduct sales in multiple states, you’ll need to allocate your income accordingly on each state return. A basic approach is to allocate based on the proportion of sales that took place in each locale.
For example, if 40% of your sales took place in State A, 40% in State B, and 20% in your home state C, you would allocate the proportional amounts of income to each state return accordingly.
Getting Help with Reporting
Reporting income from ticket sales and other side hustles can get complicated, especially factoring in deductions, sales tax, and multi-state requirements. Fortunately, you don’t have to figure it all out alone.
Consider working with a tax professional like a CPA who specializes in small business taxes. They can help you accurately track income and expenses, maximize deductions, file the right forms, and ensure you stay compliant with federal and state authorities. This can give peace of mind that your taxes are done right.
Tax software with a self-employed package can also guide you through reporting income and deductions on your tax return. Programs like TurboTax and TaxAct walk you through the specific forms and calculations required, including Schedule C, Schedule SE, quarterly estimated payments, and state returns.
The IRS website also provides extensive resources to educate yourself on reporting requirements for your small ticket sale business income and expenses. This can help answer any questions not covered above about properly including this income on your tax return.
Conclusion
In summary, income earned from reselling tickets on Ticketmaster, StubHub, or other secondary marketplaces constitutes taxable self-employment income that must be reported to the IRS and state tax authorities. Even without receiving a 1099 form, you are obligated to accurately report gross sales, deduct associated expenses, pay self-employment taxes, and file returns reflecting these earnings.
Reporting requirements apply no matter how much or little you earn from ticket resales. Proper documentation and filing of this income ensures you remain compliant and avoid penalties down the road if your side business is ever audited or reviewed by tax agencies. So make sure to keep meticulous records and report all ticket sale profits you collect each year.