Tax time and fiverr, WF, et al . . do they send out 1099's?

by 24hours 10 replies
So, a few weeks ago someone asked about setting up a fiverr clone site and like most dreamers, I thought it might be a cool thing to do. Now that tax time (read: reality check) is here, how do sites like fiverr and the WF handle income earned from the sellers?

In the US it's usually taxable once it hits $600 or more, so do they send 1099 forms to all the sellers that earn more than $600? What about non-US sellers? Is it free money to non-US residents?

Is it free (non-taxed) money in the US? Fiverr alone has thousands upon thosands of sellers. That must be an administrative/logistical nightmare! Just curious.
#main internet marketing discussion forum #1099 #fiverr #send #tax #time
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  • Profile picture of the author Alexa Smith
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    Originally Posted by 24hours View Post

    how do sites like fiverr and the WF handle income earned from the sellers?
    I don't know about Fiverr, but WF doesn't handle the sellers' money or have any involvement in the sale at all: it's simply selling advertising space, so it wouldn't have any need to do that at all?

    Originally Posted by 24hours View Post

    What about non-US sellers? Is it free money to non-US residents?
    No, people outside the US have to declare and pay tax on our own incomes from self-employment online just like our income from any other form of self-employment, according to the tax laws of the countries in which we live.
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  • Profile picture of the author redarrows
    fiverr.com does not employ anybody , people that join fiverr.com are people that want to use there skills to earn money, part time or full time. fiverr.com is not responsible for them working from the web site there self,any moneys earn t via each user is there respectability about tax and so on,
    but any commission fiverr.com earns for letting any body use there web site is taxed via there owner who owns fiverr.com....(There like a big agency but only pay there own employes not the users money that there problem ). hope you understand.

    In the uk, Once you start taking money from online from 1p to hundreds and millions, your suppose to open a business bank account in your name or a business name,and then your classed as a sole trader,your need to inform the tax office of new business. there advise you to go and register self employed and pay around £7.50 a week for national insurance, Than anything you earn below £18000 you don't pay tax for, but you need to tell the tax man via online or paper what you did earn with proof of income,In the uk if your income is below £18.000 you can get benefits for rent or even food if you don't declare your earnings while on the self employed register or lies you can go to prison for fraud, unless your very honest the tax man will help you.

    On the other hand lol, if you earn loads off cash more then 40.000 a year you than pay more tax on the money your getting.
    Example
    So if you got £17.999 a year you pay no tax but continue to pay the national insurance weekly or monthly, but because your declaring the money truthfully your also get some benefits to help you financially live.

    If your income is more then £18.000 up to £40.000 your pay tax at the rate of 20% of every penny made, and you have to pay your national insurance, in this case no benefits from the dss is allowed but you can claim for petrol and tool money yearly and a tax refund.

    If your income is over the £45.000 mark the tax will even be more,you will pay a 40% out of every penny you earn online, and yes you have to pay national insurance weekly or monthly and yes you can get a tax refund yearly and yes claim for petrol and tools and cloths.

    hope that ansaw the question what we pay in London uk.

    so if i was a really big online business, I the owner would have accountants to pay staff from managers to every day workers, and ill take a income home from the profits after every bill been paid, so even thu i am the owner but i also get wages from the business but i wouldn't be a employee, ill be the directing manager and the business will be registered as a limited company l.t.d,. In the uk limited company's have ,got get out clews for the directing managers if the company go's bust, A claws might be with the bank they pay all employes for a week or month while the business closes es down.


    So the ansaw to your question is, if i am employed via a company doing online business for them i shall be paid via the company financial books not my responsibility, but if i am working online business adventures and earn money, i have to inform the relevant people so i don't go to prison for fraud, if you got a job and your employed already and you use online for cash for extra money your still suppose to tell the tax man you can still get in trouble.

    There nothing better then being honest in this world.

    all the best john.

    sorry if anybody find this hard to understand i am very dyslexia
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    • Profile picture of the author 24hours
      Thanks John and Alexa . . .
      So WF isn't the same as fiverr because they are selling advertising space vs ???
      So fiverr charges $5.00 a gig and the sellers get like $3.92. The resulting $1.08 goes . . . where? I thought it went to fiverr, but that means the $3.92 is tax free unles the sellers declare it?

      Thanks John, but you're not really "employed" by fiverr, you're providing a service. I was referring specifically to the online fiverr/WF/iwriter scenarios of $5.00 per gig and what the admin's responsibilities are to the seller/taxman. WF is now removed from the equation since they are only selling advertising space.

      so . . if I wanted to start a fiverr clone site in the US, I would need to do ??? as far as tax responsibilities go?
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      • Profile picture of the author Alexa Smith
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        Originally Posted by 24hours View Post

        So WF isn't the same as fiverr because they are selling advertising space vs ???
        Vs handling the money and paying it to people themselves, as Fiverr does.

        Originally Posted by 24hours View Post

        So fiverr charges $5.00 a gig and the sellers get like $3.92. The resulting $1.08 goes . . . where?
        I think something like $0.08 of that is PayPal fees, isn't it? So that goes to PayPal. Fiverr pays $4.00 for the $5.00 earned, taking a 20% commission for themselves. Nothing like the Warrior Forum, in other words.

        The Warrior Forum doesn't even have a way of knowing how many sales the people advertising here have made, or how much money they've made. People can use whatever form of payment processing they want, after all.

        Originally Posted by 24hours View Post

        if I wanted to start a fiverr clone site in the US, I would need to do ??? as far as tax responsibilities go?
        I think you need a US-resident accountant, probably, to answer this one? A good starting-point might be to look around at the very large number of Fiverr competitors/clones (there are many threads here, listing them), and perhaps ask yourself why they all seem to have almost no traffic at all ... (I'm not trying to suggest that that's necessarily a question with an obvious answer, but it seems a big and striking question, anyway: my own impression is that "first mover advantage" may have quite a bit to do with it, but I might be wrong, too!).
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        • Profile picture of the author 24hours
          Thanks Alexa - you are, as others have pointed out, a thread stopper.
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  • Profile picture of the author redarrows
    You don't need to clone, you can add new twist new features ect ect competition good i fort.

    john
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  • Profile picture of the author asiriusthoth
    Technically anything over $600 earned needs to be reported to the IRS in the U.S; no matter if it's a business or an individual. Who actually does it, i'm quite sure, is very very low. Fiverr doesn't send out U.S 1099's, as they are an Israel based company

    ref: Jobs at Fiverr
    ref: Fiverr - Wikipedia, the free encyclopedia
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  • Profile picture of the author GarrieWilson
    Technically anything over $600 earned needs to be reported to the IRS in the U.S;
    Not true. It depends on if you earned enough from all income sources to file. The $600 amount is if a person needs to send a tax form to someone.

    Not legal advice. Seek advice from a competent tax adviser. They all aren't created equal.

    -g
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    • Profile picture of the author 24hours
      Thanks for all the replies - I'm not actually asking for legal/accounting expertise. I was just wondering about what's involved if someone wanted to create a fiverr clone site. Having to administer 1099's to all the sellers that make over a certain amount would definitely put a damper on a dream.

      Fiverr doesn't send out U.S 1099's, as they are an Israel based company
      Fiverr sellers claim their fiverr income based on honesty? Yeah, baby!
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    • Profile picture of the author asiriusthoth
      Not true. It depends on if you earned enough from all income sources to file. The $600 amount is if a person needs to send a tax form to someone.
      A lot of people file even if they make less then the filing amount; as a lot of these people get refunds. The statement remains the same; true.
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