collis
October 21, 2015, 6:13am
35
Natalia, thanks for the answers. Can you expand on BarBeeCues question? Forget for a minute about the 28% withholding - let’s assume that a W-9 has been properly filled out, money has been earned in 2016, and it’s now time for the author to report in 2017.
The IRS normally requires a 1099 form for invoiced amounts for services rendered by non-employees in excess of $600 in a year:
Am I required to file a Form 1099 or other information return? | Internal Revenue Service
Since Envato is treating the Author Fee as an invoiced amount that the author is paying to a non-employee for a service, isn’t this the same thing? Therefore, does every exclusive author who sells $6000 or more in a year, or every non-exclusive who sells $1364 or more in a year, need to send Envato a 1099 form in the amount of the accumulated Author Fee?
If we’re not supposed to fill out a 1099 for the Author Fee, and just write it off based on the accumulated invoice amounts as is implied, how then is this money tracked by the IRS? Can you tell us how Envato, as a US entity, is planning on filing the income from US Author Fees with the IRS?
Can we also keep in mind that using a tax advisor for even a few hours can be hundreds if not thousands of dollars? I’m sure there’s a high percentage of authors who are using TurboTax or the equivalent. Since all US authors are in the same boat starting next year, it would be great if Envato could provide us with some guidance on how to report.
We don’t require you to provide us with a 1099 form, though you should of course check with local regulations, or tax advisor, or accountant what your obligations are. Not all payments are treated in the same way.
The author fees we charge authors (along with the buyer fees we charge buyers) are Envato’s revenue.
The 1099-MISC you are issued will show the royalty revenue you have generated.