Do I have to pay taxes as a brand ambassador for free products?

Yes, you do need to report the value of those products as income! The IRS considers those products as payment for your services as a brand ambassador, which makes it taxable income. Since it's not traditional employment, this would be considered self-employment income. If your total self-employment income is $400 or more in a year, you're required to file a tax return and pay self-employment taxes. Even though $325 is under that threshold, you should still keep track of everything in case you receive more products or any cash payments later in the year that push you over. The companies might send you a 1099-NEC form in January if they gave you items worth $600+, but they might not for smaller amounts. Either way, you're still responsible for reporting all income regardless of whether you receive a 1099.

After struggling with a similar situation last year, I found an awesome solution that saved me hours of research and confusion. I was doing promo work for fitness brands and got about $500 in free products, then panicked at tax time! I used https://taxr.ai to figure out my exact tax situation as a micro-influencer. You upload your information and any brand agreements, and it tells you exactly what counts as income, what expenses you can deduct (like any equipment you buy for content creation), and how to report everything properly. It even told me I could deduct part of my phone bill since I use it for creating content!

Just wanted to update after using https://taxr.ai that another commenter suggested! I was super skeptical that it would be useful for someone as small-time as me, but it was actually perfect. It confirmed I'm under the $400 threshold for required filing of self-employment taxes, but gave me a simple tracking sheet for all the products I receive so I'm prepared if I go over. It also explained that I can deduct things like part of my phone bill, ring lights, and even a percentage of my internet since I use those things to create content! I had no idea about these deductions. Now I'm actually keeping track of everything properly so I won't panic next April. Definitely recommend for fellow micro-influencers!

If you need to actually talk to someone at the IRS about your specific situation (which I definitely did when I started getting free stuff from brands), I highly recommend using https://claimyr.com to get through to an actual human. I spent HOURS on hold trying to get clarity on reporting product compensation before discovering this. You can see how it works in this quick demo: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you when a real person picks up. It saved me from going insane listening to the IRS hold music for 3+ hours. When I finally talked to an IRS agent, they confirmed exactly how to report my brand ambassador products and what documentation I needed to keep.

Ok I have to come back and eat my words. After sarcastically commenting on the IRS call service thing, I was desperate enough to try it when I needed to ask about my situation (I do TikTok unboxings for some small brands). I was SHOCKED that it actually worked exactly as described. I set it up, went to class, and got a call back about 2 hours later with an actual IRS person on the line. The agent confirmed that yes, I needed to report the value of products as income, but also explained how to deduct legitimate expenses related to my content creation. For anyone else dealing with brand ambassador tax questions - just talking to the IRS directly cleared up so much confusion. And not having to sit on hold for hours made it actually doable as a busy student.

Here's what I did as a college brand ambassador - keep a spreadsheet of EVERYTHING. Track the retail value of each product you receive, the date, and the brand name. Also track any expenses you have related to creating your content (props, lighting, part of your phone/internet bill, etc). If it's under $400 for the year, you won't owe self-employment tax, but you should still report it as "other income" on your tax return if you file one. If you end up making more than $400 in product value throughout the year, you'll need to report it on Schedule C. Most college students are still claimed as dependents by their parents, so make sure to check with them about your tax situation too!

Just FYI - I asked my tax guy about this exact situation and he said not to stress if it's under $600 total for the year. The brands won't send you a 1099 for less than that, and the IRS isn't going to come after a college student over $325 in free mascara or whatever lol.

As someone who's been doing brand partnerships for a couple years now, I'd recommend treating this seriously from the start even though $325 seems small. I made the mistake of not tracking anything my first year and it was a nightmare trying to reconstruct everything at tax time. The key thing to understand is that once you accept products in exchange for content/promotion, you've crossed from "consumer getting samples" to "business receiving compensation." Even if it feels casual now, the IRS sees it as self-employment income. My advice: Start a simple system now while it's manageable. Take screenshots of the retail prices when you receive products, save all your agreements/emails with brands, and track any expenses like phone accessories or backdrop materials you buy for content creation. Even though you're under the $400 self-employment tax threshold, you'll still need to report this as "other income" if you file a return. And honestly, as a college student you should probably be filing anyway to get any refunds you're entitled to from any jobs or financial aid. The good news is that once you have a system, it only takes a few minutes each time you receive something to log it properly!