I’m also a bit confused…we’re supposed to claim 100% of the sale? Last year, I claimed what I earned and did not write off Envato’s cut as an expense – as my accountant advised.
Unless I’m confused, I now need to claim 100% – which is 40% more than I actually see at any time. The only plus side to this is the ability to write off Envato’s cut as an expense, but would still mean this costs me more money in taxes.
However, my big concern is that Envato doesn’t quite seem setup for this. When I make a purchase, I see the amount that the author gets paid, then Envato’s amount – labeled as a “Buyer Fee”. To me, this says money goes from the Buyer to Envato.The Author Terms Page says the same (8b): http://codecanyon.net/legal/author#how-selling-your-items-works
Buyer Fee: The item price a buyer pays also includes a fee for the buyer services they get from Envato like 24/7 buyer support, fraud protection, item quality control and other related buyer services.
So… I’m supposed to claim 100% of a sale, then write off the “Buyer Fee” as my Author Expense?
Am I supposed to claim 100% and if so, am I supposed to be writing off the “Buyer Fee” which appears to be coming from the Buyer to Envato?
[ speaking as an author ]
The problem arises because Envato does not pay me. The money sent to my partners is sent directly from Envato to their bank account. This money is never my money, at any point in the payment process.
This is a bit of a grey area in my opinion, since technically you can use your PayPal account as your only bank account now. If you weren’t ever going to move your money into your bank account, how would the IRS track it? PayPal is your point of payment, and your “bank account” is being paid by Envato.
We do? I don’t ever recall signing my name on a dotted line, Envato doesn’t even know who I am or where I live. Clicking a button on their terms of service does not give them the right to withhold earnings because they think I could, quite possibly, MAYBE be from the U.S.
Contractual agreements don’t necessarily always require written contracts. Verbal contracts or simply agreeing to the terms of service (such as when you signed up for the account) are all viable contracts.
Furthermore, they’re only going to withhold earnings if you try to cheat them. If you read through the link (especially the one that links out to the IRS site) – it is required by law for any company to do this under certain circumstances. If you don’t provide the proper tax ID number, they must withhold a flat 28%. If you do everything the correct, legal way – then nothing really should be changing, unless you’re currently avoiding taxes.
+1 Most of the world is caught up with other devices to really appreciate the uniqueness and simplicity of WP, but I agree this would really open the doors to a whole new level of CodeCanyon. I think we should be covering a lot more ground and have categories for many non-web related submissions as well, but it takes time to put all of this together.