CCbill tax question

[Xstr8guy]

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?

[ArmpitLover]

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

[Xstr8guy]

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.

[ArmpitLover]

That's precisely what 1099s are for... independant contractors. At least that's what I thought.

Oops DUH you're right!

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'

[JustBryce]

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

[TheWhack]

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

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.

[Lee]

and that company would have to send you the 1099, not ccbill.

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.

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

[basschick]

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.

[TheWhack]

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.

Really? even if all the bank clerks like me?

Damn those banks

[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.

I thought banks only needed to report any deposits larger than $10k during any single deposit?

Regards,

Lee

[maxpower]

I thought banks only needed to report any deposits larger than $10k during any single deposit?

Regards,

Lee

Your right they do, the bank will give you up if they ask, but they have to ask first.

[Seth]

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.

[Xstr8guy]

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?

[hdkbill]

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?

Jim,

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

[nickbaer]

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.