My first 2 sales !! I’m happy! But the balance is wrong. Total without tax $ 10, balance is $ 2.76. Removed the fees should not be $ 8?
It seems you haven’t filled out a W8 form yet. Go to your profile >> Settings >> Tax information under “Author Tools” and complete the form there.
List Price = $5.00
Buyer Fee = $1.00
Author Fee = 37.5%
US Backup Withholding Tax = 28% (because you don’t give Envato your Italian taxpayer infos)
$5.00 - $1.00 = $4.00 gross income
$4.00 * 0.375 = $1.50 author fee
$4.00 * 0.28 = $1.12 us backup withholding tax
$4.00 - $1.50 - $1.12 = $1.38 earnings
2 * $1.38 = $2.76
Osama has told you the actions you have to do now.
Ok done, Will the fee be refunded?
No, the IRS won’t refund you. However, next year in Jan (or March I’m not sure) Envato will mail you a document that indicates the amount of taxes you paid to the IRS. I think then you can use that document to get a reduction on your local taxes. I’m not exactly sure how that works, but a tax adviser or accountant should be able to help.
I understand. Will this tax cease to apply to future sales? In the case of a positive response, what will be the net gain for every $ 5 (for example)?
Thanks in advance for help
This depends on the tax treaty between your country and the United States.
- There is indeed a tax treaty between Italy and the United States, so you should be okay from here forward.
- You’ll still be charged withholding tax for sales from United States buyers (I think).
- You can find full details at this page.
You’ll receive $2.50 per sale, based on @Sealord’s math, and you will earn an even higher percentage as you sell more.
- if no W-8 form is provided = 28% Backup Withholding Tax on all sales
- if W-8 form is provided but without your Italian TAX ID as Foreign Tax ID = 30% Royalty Winthholding Tax on US sales only
- if W-8 form is provided with your Italian TAX ID as Foreign Tax ID = 0% Royalty Winthholding Tax on US sales