I bet Komplete 10 travels better.
We have a a global and a regular sticky. The post was set as regular instead of global sticky, so maybe someone hit the wrong button. Either way, this area is top of mind whether this post is sticky or not. We haven’t forgot about it
Just take care and do some reading before jumping the gun on this. Everything I’ve researched about this tells me that companies (like Envato) are not supposed to include third party payments in a form 1099 because it defaults to the responsibility of the payment settlement entity(Paypal). Since all payments are made to authors through third party payment systems, I’m not sure what exactly Envato is planning on reporting. This only makes sense if you had my bank account number for direct deposit, and I don’t see that going over well either.
I just thought of another extremely important issue with regard to the double reporting with PayPal and Envato: Even if Envato didn’t include the “expenses” in the total earnings on the 1099, the two figures from PayPal and Envato won’t match since PayPal calculates the figure when you receive the money and Envato is calculating it when it was earned.
So, for example, the amount you sell this December will be counted toward 2014’s income, according to Envato, but since you won’t receive it until January 2015, PayPal will count that toward 2015’s income.
This would obviously create a situation where the IRS receives 2 different figures either way, inevitably causing suspicion and an audit for the author, and eventually Envato, I’d imagine.I’d appreciate it if you could address this issue when you make your statement.
MVPThemes (and any others with this concern),
Not sure if this truly answers your question, but this is the IRS ruling regarding the double 1099 issue, pulled directly from the 1099 instructions:
“Payments made with a credit card or payment card and certain other types of payments, including third party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K.”http://www.irs.gov/instructions/i1099msc/ar02.html
In real human language, this means that unless Envato is paying you by cash or check (which would trigger a 1099-MISC), they have no purpose sending any 1099 to you or the government, and must rely on the “payment settlement entity” (AKA Paypal) to report the earnings via form 1099-K.
If Envato sends you one anyway, then you have to contact them immediately so that they can send a corrected 1099 back to the government.
It is all a hot mess.
frontiersoundfx saidAre you serious? Where is this information? Can the staff please reply to this. I read the tax info and I did not see where it says this. If this is the case, I really do not see how they can get away with this. Its an evasion of taxes on their side. I just don’t believe that. I have a little more trust in Envato.
Instead of Envato claiming 70% of the income and writing off 30%, now they only have to claim 30% and write off the 70%, thus forcing the blunt of the tax liability to be handled on the side of the US authors rather than the company. I suppose its six of one, a half dozen of the other, but it seems like a major disservice to some loyal marketplace authors.
Notice that I modified my quote later because it was not clear. It is not tax evasion, but somebody has to pay. The responsibility is just becoming greater for the author if Envato goes through with the proposed way of doing the 1099s. The individual author becomes responsible for writing off the expenses against gross sales, rather than just paying taxes on the actual earnings.
It seems to me that Envato is doing some clever accounting to force the blunt of the tax liability on the shoulders of the US authors rather than the company. I suppose its six of one, a half dozen of the other (if you know enough to deduct the expenses properly), but it seems like a major disservice to some loyal marketplace authors.
More than a passing hobby for me, but less than a real job? I don’t bother to keep track of the hours since I view it as more of a creative release than work, but the benefits of passive income for a freelance designer is causing me to further develop the business. It is nice to give new life to some of my older material too, rather than just have it sit around on a hard drive.
Congratulations! I’d love it if you would log some of your sales data and share it with us. Always nice to see how being featured benefits the author
check this thread: http://audiojungle.net/forums/thread/how-to-write-a-corporate-track-that-sells/119090?page=1
Thanks for posting Matthew’s article again! I found this once and lost it. Glad to have to back in my hands.
I compose things that I enjoy or challenge me in some way, and if it happens to be marketable in the end, then it is icing on the cake. This is certainly a hobbyist composer’s point of view, and I haven’t decided to quit my day job, but every attempt teaches my something valuable for the next session.
I guess it begs to ask the question… “What do you consider AJ music?”. Lord save me if the only thing on here was corporate motivational.