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This is a question for those who earn income from CCbill sponsors... not program owners.
Who actually pays taxes on their CCbill affiliate income, since they don't send out 1099s? If you don't want to publicly post an answer, please answer the poll and/or PM me with your answer..
And how does CCbill get away with not sending out 1099s?
This question came up today for me.... I think its because they clasify us as independant contractors...but I am checking with my accountant in the AM...I'll post whatever is his verdict
That's precisely what 1099s are for... independant contractors. At least that's what I thought.Quote:
Originally Posted by ArmpitLover
Oops DUH you're right!Quote:
Originally Posted by Xstr8guy
Well as I said I'm checking with my accountant tomorrow so I'll let you know how/why they are doing what they do....I pulled up both my WM and my affiliate accounts with CCBill today and I'm just adding the Net profit to 'additional income'
I hope you guys aren't getting checks made out to your personal names. In this line of work you have to form a corporation. All of your personal assets such as your home, autos, boats, investments and even savings are at risk if you get sued. They could be used to satisfy any law suits, liability incurred by the business or debt incurred by the biz. If you properly form and maintain a corporation then personal liability protection is extended to the owners (shareholders) of the corporation for any debt or liability incurred by the business. Normally your total liability would be limited to how much you invested in the corporation only.
Forming a Corporation also has tax benefits. You can minimize self-employment taxes and certainly increase the allowable deductions which will lower the taxes you pay on the businesses income. If you can you should also look into structuring a retirement and/or tax deferred savings plan which can give you even more tax benefits.
Having a corporation has all kinds of other benefits that you should consult a lawyer about. I'm sure Chad could name tons of other very good reasons to operate as some kind of corporate entity.
To answer your question though, we report every penny taken in and expended in our returns. It's all in Quickbooks so there really is no need for a 1099. You have to report it otherwise you are really playing Russian Roulette with everything you are working so hard on every day. It's just not worth it.
Thats my .02 anyway :)
Quote:
Originally Posted by JustBryce
Actually I looked at the difference between corporations and filing a DBA. With a corporation its a much higher tax bracket. Until you are making over 40k a year its best to file a LLC. A DBA does not provide as much protection but for me I would rather pay lower taxes starting out. Corporation was almost twice as much in taxes. LLC means you would have to have at least 1 shareholder, being yourself.
My understanding with 1099's is you need to make over 600 a year with a company that uses ccbill... and that company would have to send you the 1099, not ccbill.
But I would like to know for sure myself.
Thats true BUT there is no way in the CCBill Webadmin system for program owners to get your information to send you the 1099's.Quote:
Originally Posted by TheWhack
Ive actually terminated 9 affiliates in the past month because they havent sent me the info i needed to get their 1099's out to them :(
Regards,
Lee
regardless of whether ccbill or the program owners send out 1099s or not, your bank will report how much money you have deposited for the year.
Quote:
Originally Posted by basschick
Really? even if all the bank clerks like me?
Damn those banks
I thought banks only needed to report any deposits larger than $10k during any single deposit?Quote:
Originally Posted by basschick
Regards,
Lee
Your right they do, the bank will give you up if they ask, but they have to ask first.Quote:
Originally Posted by Lee
As an affiliate you are not making money directly from CCBILL, Verotel, Paycom, etc. You are making your money from the site(s) you're promoting. CCBill & the others are simply the processor or the middle man if you will.
That is understandable but how come I NEVER get 1099s from any CCbill sponsor programs?Quote:
Originally Posted by Seth
Jim,Quote:
Originally Posted by Xstr8guy
All of the affiliate programs we belong to we join using our corporate name and provide ccbill our EIN number. Checks are made out to the name of the corporation and deposited with all other funds and then are part of our gross income at the end of the year so taxes are paid.
For our affiliate program, we require that affiliates provide us with a social security number of EIN at the time they join. At the end of the year we send out 1099's. If they get returned undeliverable, we at least have proof that we sent them. Don't know what would happen in the case of an audit, but so far so good. I think the law only requires that we send to the last known address.
As for forming a corporation and which is best...a S Corp or C Corp or LLC, each individual should check with their accountant. But, food for thought, their are no corporate taxes in Nevada...at least no state taxes, and if you form an LLC there, you don't have to reveal you name....you can have a resident agent act as the managing partner. Seems like lots of companies have done that and Nevada doesn't report to the IRS since they don't collect state corporate taxes. I have no idea about the legalities....but I know several guys who have done it and they seem to fly under the radar, or so they say.
Bill
Over the past 15 years of processing credit cards, I've never had a processor send me a 1099... First Data, Merchant Services, PayPal, and the rest.
So I believe the previous post regarding 'middleman processors' is correct.
A 1099 comes from another business, one that pays you for (goods and) services directly received. The 1099 is the equivalent of a W2 issued to 'employees'.... 1099 for businesses and non-incorporated individuals acting as independent contractors providing (goods and) services, W2 for employees.
Many businesses require W9s from other businesses to open accounts, and issue 1099s in January, because over zealous State revenue collectors make bsuinesses prove that payments they make are truly 'non-employee' payments. Payments paid to employees, known as wages, are subject to with holding, Social Security taxes, Unemployment taxes, FICA, etc.
If a business in question cannot prove that the recipient business is a 'non-employee', they get slapped with those State and Federal employee taxes AND penalties.
Your CCBILL revenue is simply revenue, not unlike checks from customers, reportable as you normally report income. No 1099 required.
Ok, so I need to report CCbill income. I never did receive 1099s from my CCbill sponsors probably because I didn't have the box checked to allow my information to be viewed by sponsors. I've corrected that now.
Does anyone know how I should report this income? By each affiliate program or can I lump it all together? Do I report it by check date? If so, the check stats don't brek it down by sponsor. If I run my stats for the year, then i'm not reporting my income accurately because the check dates are different than sale dates.
Btw, if I haven't received 1099s, does that mean the IRS has no record of my CCbill income? Hmmm.
Xstr8guy,
If they don't issue a 1099 I'd guess the IRS doesn't know about it.....but then, your luck and mine.....they (CCBill) will get audited and then we'd have to pay plus penalties and interest.
Would seem to me that you could lump it all together. The IRS doesn't give a damn what you call it, as long as you report it!!!
Hugs,
Bill
PS
LOVE YOUR BANNER!!!!! Thanks!
Thanks Bill. That's exactly what I thought... better to report it than get audited. :(
I think that's really the key and the best way to be on the safe (and legal!) side.
Whether or not you get 1099'ed, keep track of your income from whatever sources and declare it all when it comes time to do so.
As the FILER of the 1099, a sponsor would pay all penalties when there is wrongdoing. As the PAYEES, we webmasters would not be responsible for paying for their mistakes unless the IRS decides to audit you as well and determine that you didn't pay appropriate taxes.Quote:
Originally Posted by hdkbill
The sponsor could politely ask that you provide proof of your tax payments, and they would be exempt from paying that portion in the penalty. But whatever a webmaster doesn't pay, the company responsible for sumbitting 1099's is the company that gets the tax bill, not the payees.
It would take hundreds of individual audits for that to happen, and that is a waste of the IRS's time. They just go after the big money.
EDIT: oh wait... I might be thinking of that provision where a person is paid as an independent and not an employee... but I think this still pertains. The 1099 filer pays the penalty, not the receiver unless they are personally audited.
well... the interesting issue here is that the sponsor never sees the money paid to an affiliate by a CCBill program, receives no accounting from CCBill which would allow creation of 1099s (granted, it would be possible to generate reports of this, but with only limited data)
Our understanding is that we are not responsible for 1099ing affiliates on moneys we never received or paid out. Of course, since we switched to NATS and make our payouts directly, all of our affiliates receive 1099s for any payments made to them in excess of $600 per year.
But anyone who avoids reporting of income from affiliate sales through ccbill is asking for trouble. Either your bank or CCBill could easily document the monies paid out, and you'd be SOL.
I sure wish CCbill would come in here and explain some things. It sounds to me like they are in a potentially dangerous position here.
Well im actually going to make a start on at least trying to get 1099 info from around 120 affiliates next month who have made well over the $600 mark on Condom Cash in the last year and based on last years tax experiences its going to be pretty difficult to get that information :(
Regards,
Lee
When someone signs up to be an affiliate, couldn't you require they provide the necessary 1099 information in order to be a member of your program? I would even go so far as to require your current affiliates to provide this information if they want to continue in your program. You are only doing what is right and required by law. I wouldn't risk an audit from the IRS because someone else may not want to pay their taxes. CYA
Donnie
When you sign up as an affiliate through ccbill you have the option of "Let webmaster see your address"
If they made it so and not just an option - it would help out some.
using ccbill
When I make a sale for whatever ccbill site.
the site owner is not getting paid the full amount and then sends me my 50%.
the site owner is getting his 50% and should report that.
I still should report my income. But I don't see why I should get 1099 from site owners except when they use affiliate scripts that allows them to get all the money and then send me my cut.
That's how I see it.
I dont think it is the site owners responsibiltiy to give the 1099. I, and my accountant, think that would fall on CCBill. CCBill is handeling every aspect of the transaction, and as such, is the responsible party. But I plan to go back and read my contract with them.
I think if you simply report your income, even on your 1040 as Misc. Income, you would be protected from any penalties, etc should there ever be an audit. But I would love to hear CCBills and a real lawyers take on this.