Taxes 1099-MISC

Just got my 1099-MISC tax form. It shows my royalties paid to me were nearly $700 more than I actually received.

What do I do?

Let’s say you have an item priced at $20. Envato’s buyer fee for that category is $5, and your author fee is 35%. Envato will tell the IRS you earned $15. They don’t deduct the author fee from your reported earnings.

To find the amount you paid in author fees:

  1. Go to your Statement page.
  2. Select “More options”
  3. Choose the Period option.
  4. Select date range: Jan 1 2016 — Dec 31 2016.

At the top you will see “Earnings” and “Fees”. Confirm the “Earnings” matches what is shown on your tax form, and subtract the “fees” to get your actual income.

Just to piggy back on what has already been said:

Assuming the amount is accurate, you’ll need to report the full earnings amount listed as income on a Schedule C. You’ll then subtract the Author Fee as a business expense on a Schedule C.

I’d probably put this expense on Line 10 (Commissions and Fees).

Otherwise you can just enter something like “Envato Author Fee” on line 48, then input the total in Line 27a (Other Expenses)

If I’m speaking gibberish, go to a search engine and do some research on “Schedule C Self-Employment Income”

Here is what the form looks like:
https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

I’ve been running a self-employed business for a while now and I’ve been a paid tax preparer for the last 2 years. I’d always recommend visiting a tax specialist in your area to answer any state or local discrepancies, but I’m happy to field any questions that come up to the best of my ability.

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Yeah, I think that’s the proper way to do it… list price, minus buyers fee, should be listed as income, and authors fee should be listed as an expense. Don’t quote me on that, but it makes sense.

Isn’t it supposed to be on line 10 (Commissions & Fees) not line 48?

Envato doing the 1099-Misc the most backwards way possible.
I seriously can’t believe they decided to add fees & commissions to the 1099.

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I made a powerpoint template a while ago, uploaded it and largely forgot about it a week later. Around a year later (a few days ago) I received a 1099-MISC with no instructions/context.

Does being a UK resident impact how I should file “Schedule C”?, (I don’t have a SSN etc)

The amounts of money are very small, but I have little knowledge of the US tax system. I’ll get this sorted and delete the template.

I assume you have never sent the W-8 form to Envato or did it later in 2016 and
without W-8 form you were treated as a US citizen without taxpayer infos and had to pay US Backup Withholding Tax. Backup Withholding Tax is reported on 1099 form to the US IRS and you get a copy of that paper.

Thats correct, so do I need to take any action now that I have received this?

Thanks for the speedy response!

I don’t know how it works in the UK but here in Germany I have included in the past years such a document (withheld money from US shares) in my tax return and got back the money because the amount was under a specific threshold. I would advise to aks a UK tax expert.

I’m from Indonesia and just get this Form 1099-Misc Copy B today, while i have been inactive for many years here.In the Recipient box all is empty only in the payers Box: Box 2 Royalty with very low amount and Box 4 Federal income witheld fees.
What should i do with this form?can i ignore this?

Thank you
*sorry for my bad english

Hello,

I just got a 1099-Misc form. I am not from a tax-treaty country, and the amount is quite small.
Can I ignore it and let them keep all the tax they need? Do you think there are unwanted consequences in doing so?

Thank you,
Juan

There are still a couple days left before US taxes are due for tax year 2016, so I wanted to give you access to a recent article I’ve put together regarding the tax treatment of Envato income for US Authors.

Tax Guidelines for US Stock Media Contributors

I’ve seen some confusion about how to report the income since Envato’s 1099-MISC this year was issued as royalty income opposed to non-employee compensation. Hopefully this article will clear that up and provide a better understanding of the tax implications involved when selling stock media.

Please let time know if you have any questions.

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