Author Topic: Taxes (Read 4207 times)

Old School · « **on:** March 14, 2018, 21:25 »

Help. Just help.

I can't find a ref or post that is specific to what I need, so if anyone can help, PLEASE, I'd truly appreciate the feedback.

I've been a microstock contributor for 10 years now, and a US citizen, paying US taxes.

This year I had to change tax advisors. She turns out to be very strict and apparently I might have been reporting taxes incorrectly ALL THIS TIME. Yikes. Sigh.

I've just been reporting payouts, either by 1099 or by actual non-1099 payouts to PayPal for the tax year, for each agency I'm signed with.

The new advisors says I have to dig into earnings and report the actual EARNINGS, paid out or not, to the penny, for the year for each agency, paid out or not.

The trouble is that some agencies make it pretty difficult to find that information. If I’ve earned enough, some send 1099’s. If I’ve not earned enough, the money may sit until I request a payout, or until I’ve at least earned the minimum to MAKE a payout request.

WORSE, some agencies show as many as three DIFFERENT amounts for a given year. At Shutterstock for 2017 this is how my records look:

   My Shutterstock 1099 for 2017 = 1617.10

   A download of my actual shutter stock earnings for 2017 = 986.70

   The actual payout to PayPal for the year (requested and paid earnings) = 1,114.96

Jeeze. The 1099 is the one that's important, of course. But what are all these variables? Why did I get a 1099 if I actually earned 986.70? If I hadn’t earned enough to get a 1099, would I have reported the ACTUAL earnings as SS reported? They’re different amounts! (I did leave a message with SS begging for their view, but still.)

Now I realize no one here can give me legal tax advice, but I'd truly appreciate it if a few microstock contributors have a moment to explain how THEY'VE been reporting and paying taxes so I can take the info to my tax advisor. That's what she's asking for. Examples of how other US citizens are reporting and paying taxes for microstock earnings.

Thanks a TON to anyone who has the time and interest to reply! Just thanks.

angelawaye · « **Reply #1 on:** March 14, 2018, 21:42 »

Don't listen to her - follow your MISC 1099 and if they don't provide the 1099 then you can easily calculate earnings via PayPal.

If you sell with Creative Market make sure to deduct THEIR earnings from your MISC 1099 too (in the expense section). This is the only agency that does it (along with Etsy).

I've been doing this for 10 years.

KB · « **Reply #2 on:** March 14, 2018, 21:49 »

Quote from: Old School on March 14, 2018, 21:25

At Shutterstock for 2017 this is how my records look:

   My Shutterstock 1099 for 2017 = 1617.10

   A download of my actual shutter stock earnings for 2017 = 986.70

   The actual payout to PayPal for the year (requested and paid earnings) = 1,114.96

Jeeze. The 1099 is the one that's important, of course. But what are all these variables? Why did I get a 1099 if I actually earned 986.70? If I hadn’t earned enough to get a 1099, would I have reported the ACTUAL earnings as SS reported? They’re different amounts! (I did leave a message with SS begging for their view, but still.)

As angelawaye said, it's best to follow the 1099. However, you may want to check your figures. I've been with SS for more than 10 years, and their 1099s have ALWAYS matched my own records. They (along with every other agency I contribute to except FT) have always matched the amounts paid to me via PayPal during the calendar tax year. (That is, the actual month the payment was deposited, not when the sales occurred.)

niktol · « **Reply #3 on:** March 15, 2018, 06:05 »

Not a lawyer, not an accountant, not a US resident. My tax situation is probably more complex that for most people here, as I have to report taxes in the US and another country simultaneously. Yet I believe many things are common between countries, and here it is. You can always choose to only count earnings that you received on the bank account. You don't have to count earnings that were not paid out, because technically they aren't. How do you count fotolia credits? I can't say anything about 1099 mismatch, it looks like a mistake that has to be resolved with SS.

Here's some reading

https://www.americanexpress.com/us/small-business/openforum/articles/cash-vs-accrual-and-why-accounting-matters-for-taxes-1/

Sean Locke Photography · « **Reply #4 on:** March 15, 2018, 07:31 »

I work on a cash basis. When the money gets into my account. So that's what I report. Which may not match the 1099 year to year, but in the end it all does.

niktol · « **Reply #5 on:** March 15, 2018, 08:10 »

I also work on a cash basis. The accrual basis would be such a PITA in our business. I could make a few bots to keep the books in order on a daily basis, but I don't see any benefits. My total earnings fluctuate from year to year (because of other things I do), so to optimize my taxes I withdraw cash from agencies to offset these fluctuations.

I am a little surprised that this new accountant insists on the accrual basis claiming that cash basis is incorrect. In all honesty, I only had one encounter with a US-based tax accountant and I wasn't impressed. I guess the country is very big and cross-border issues isn't something they see very often. But then why not just say that you don't have the competency? I ended up explaining to her what tax residency is, how taxes are affected by tax treaties and trade agreements. I still had some questions and she answered them, but as it turned out later, incorrectly. I paid 200 bucks for the "consultation".

The moral of the story is, choose your accountant very carefully.

Old School · « **Reply #6 on:** March 15, 2018, 10:36 »

Thank you all for taking your time to respond. Truly.

I get it now. I've been doing it the best way all along ever since 2007, and I'll pass the reasons on to my new tax advisor. Also, after contacting SS with the question about why earnings, payment, and 1099 were all different, they explained that they 1) only report and 1099 when they PAY, and 2) since acquiring Bigstock their 1099's include those earnings. So I was about to report them seperately and find I can just exclude Bigstock PayPal earnings. SS 1099's them, and that alone saves me paying on $500+ US bucks I was about to double report.

All good. Thanks to all.

Justanotherphotographer · « **Reply #7 on:** March 15, 2018, 11:22 »

Just sack the accountant and get a better one?

angelawaye · « **Reply #8 on:** March 15, 2018, 13:33 »

Last year SS and BIG's 1099's were separate I believe.
Thanks for letting me know for this year.

I haven't started my taxes so I didn't compare numbers yet.
I'm waiting on 123RF to mess everything up...

sgoodwin4813 · « **Reply #9 on:** March 15, 2018, 19:23 »

What the others have said - go with the 1099s, as that's what gets reported to the IRS. If no 1099, then what you were actually paid during the year - it's not earnings until it's paid out. Except for FT, which reports on earnings regardless of whether they have been paid, but that is reflected in their 1099. Very confusing. And for Canva, you can get a credit for the foreign taxes that they will deduct.

jjneff · « **Reply #10 on:** March 15, 2018, 19:54 »

I turn in my 1099's and calculate how much I have earned with the sties that don't send out 1099's and give it to my accountant.

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Author Topic: Taxes (Read 4207 times)

Old School

angelawaye

KB

niktol

Sean Locke Photography

niktol

Old School

Justanotherphotographer

angelawaye

sgoodwin4813

jjneff

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