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Author Topic: Withholding Tax  (Read 17460 times)

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« on: May 20, 2015, 06:21 »
0
Anyone else make this mistake?  Is this dead money?


https://secure.istockphoto.com/forum_messages.php?threadid=366635&page=1


ShadySue

  • There is a crack in everything
« Reply #1 on: May 20, 2015, 06:37 »
0
What did contributorhelp say?

dpimborough

« Reply #2 on: May 20, 2015, 06:41 »
+1
Typical you filled in the tax interview they screwed up now you have to jump thru the hoop with the IRS to get your money back?  What a crock!

« Reply #3 on: May 20, 2015, 09:41 »
0
Well, I made the mistake of not redoing the tax interview to make sure they had the taxpayer ID for my LLC, and they took the money out one month. I'm not going to bother worrying about it. I'll just collect it when I do my taxes next year.

If you're overseas, I think the money will probably be gone. You will not be able to get through to the IRS. I would just call it a loss unless it's a lot of money.

« Reply #4 on: May 20, 2015, 17:31 »
0
I haven't contacted contributor help yet as previous experience is that they respond with some prepared script that doesn't actually deal with the question posed.  If tax is overpaid at work, my employer would refund in the next payment as long as it's within a current tax year so I would have reasonably expected the same from IS.  I don't believe either that all the sales were US sourced.  I was just curious if anyone else is in the same boat as it would avoid the blood pressure increase I'd suffer dealing with the service desk idiots at IS.

« Reply #5 on: May 21, 2015, 04:10 »
0
Luckily I sell so little with them that I don't know if they are withholding yet.  That would be the final straw for me, I pay tax in the UK and don't want to pay in the US, so my portfolio would go down to 1 image if they screw this up.

ShadySue

  • There is a crack in everything
« Reply #6 on: May 21, 2015, 04:11 »
0
Luckily I sell so little with them that I don't know if they are withholding yet.  That would be the final straw for me, I pay tax in the UK and don't want to pay in the US, so my portfolio would go down to 1 image if they screw this up.
I pay tax in the UK, and 0 on iStock. (At least, so far.)
You can re-do the tax interview if you think you got it wrong first time (OP mentioned a 'mistake')
« Last Edit: May 21, 2015, 04:29 by ShadySue »

« Reply #7 on: May 21, 2015, 04:54 »
0
Do people pay tax in the US on all their income?  We don't pay income tax in the UK until we earn 10,000.  Why isn't their an earnings threshold for withholding tax?

« Reply #8 on: May 21, 2015, 04:56 »
0
Luckily I sell so little with them that I don't know if they are withholding yet.  That would be the final straw for me, I pay tax in the UK and don't want to pay in the US, so my portfolio would go down to 1 image if they screw this up.
I pay tax in the UK, and 0 on iStock. (At least, so far.)
You can re-do the tax interview if you think you got it wrong first time (OP mentioned a 'mistake')
Correct - I never paid tax until now, didn't read the small print when they changed from Canada to US and altered the payment request method.  Shouldn't have to pay from here but disappointed in the way it was managed (communication far better on every other site).

« Reply #9 on: May 21, 2015, 08:35 »
+1
Do people pay tax in the US on all their income?  We don't pay income tax in the UK until we earn 10,000.  Why isn't their an earnings threshold for withholding tax?

It's kinda complicated. You don't have to file a return unless you earn a certain amount based on your filing status (single, married, head of household), but people who get pay checks pay income tax out of their checks regardless. If they're income is low and they paid some tax out of their checks, they're likely to get all of the income back when they do their return. You can even get back more than what you paid if you qualify for certain credits. And this does not account for Social Security and Medicare tax, which is a separate issue. So even if you make a little, you should file a return anyway.

If you register with some of these stock sites as a sole proprietor and give them your personal social security number, they will withhold tax just like you were getting a standard check. The better option is to do an LLC, get a federal employer tax ID and apply that way. If you do that, you won't pay income taxes up front, and it will help with other taxes as well.

shudderstok

« Reply #10 on: May 21, 2015, 09:36 »
+3
Luckily I sell so little with them that I don't know if they are withholding yet.  That would be the final straw for me, I pay tax in the UK and don't want to pay in the US, so my portfolio would go down to 1 image if they screw this up.
I pay tax in the UK, and 0 on iStock. (At least, so far.)
You can re-do the tax interview if you think you got it wrong first time (OP mentioned a 'mistake')
Correct - I never paid tax until now, didn't read the small print when they changed from Canada to US and altered the payment request method.  Shouldn't have to pay from here but disappointed in the way it was managed (communication far better on every other site).

these are IRS laws that apply to all US based stock companies not just IS. the transition was pretty well documented from the beginning, if you did not read the small print of which was pretty clear, that is probably why communication is far better on every other site.

ShadySue

  • There is a crack in everything
« Reply #11 on: May 21, 2015, 13:19 »
+4
Luckily I sell so little with them that I don't know if they are withholding yet.  That would be the final straw for me, I pay tax in the UK and don't want to pay in the US, so my portfolio would go down to 1 image if they screw this up.
I pay tax in the UK, and 0 on iStock. (At least, so far.)
You can re-do the tax interview if you think you got it wrong first time (OP mentioned a 'mistake')
Correct - I never paid tax until now, didn't read the small print when they changed from Canada to US and altered the payment request method.  Shouldn't have to pay from here but disappointed in the way it was managed (communication far better on every other site).
I'm not sure how much better the communication could have been.
I got at least two emails (I don't get all their emails, so there might have been more), one well in advance, there were a few threads about it on their forum, from weeks before it started until weeks after, and I'm pretty sure there was some sort of diversion on the site 'encouraging' me to do the interview when the time window opened.

« Reply #12 on: June 06, 2015, 12:27 »
0
So did eventually get a reply of the "tough luck" variety - no surprises there!!


It seems though that they deduct 28% from non-US sourced sales which is a new one on me - thought only US sales were subject to US taxes? 

« Reply #13 on: June 06, 2015, 13:21 »
0
It seems though that they deduct 28% from non-US sourced sales which is a new one on me - thought only US sales were subject to US taxes?

People living in non treaty jurisdictions who complete the tax interview properly are not subject to withholding tax on non US sales. People who do not complete the tax interview properly are taxed on both US and non US sales. This was explained at various points ahead of the change.

Remember that part of the purpose of the tax interview (from the US govt perspective) is to identify US citizens living abroad. US citizens are subject to US tax wherever they live. Correctly completing the interview is therefore also about identifying yourself as not being a US citizen.
« Last Edit: June 06, 2015, 14:25 by bunhill »

« Reply #14 on: June 06, 2015, 17:59 »
0
OK that's as good of an explanation as I'll get, thanks.


It still seems weird that they can't make retrospective adjustments (not as if they send individual payments to revenue for each contributor) but ,given their incompetence with the big stuff, it's no surprising they can't handle anything small that's out of routine.

dpimborough

« Reply #15 on: June 08, 2015, 04:02 »
0
OK that's as good of an explanation as I'll get, thanks.


It still seems weird that they can't make retrospective adjustments (not as if they send individual payments to revenue for each contributor) but ,given their incompetence with the big stuff, it's no surprising they can't handle anything small that's out of routine.

Of course they could make those adjustments but they won't because it's too much like hard work  >:(

« Reply #16 on: June 08, 2015, 07:07 »
0
OK that's as good of an explanation as I'll get, thanks.


It still seems weird that they can't make retrospective adjustments (not as if they send individual payments to revenue for each contributor) but ,given their incompetence with the big stuff, it's no surprising they can't handle anything small that's out of routine.

Of course they could make those adjustments but they won't because it's too much like hard work  >:(
I think I read that it's an issue the contributor has to take up with the IRS. 

« Reply #17 on: June 08, 2015, 16:21 »
-3
OK that's as good of an explanation as I'll get, thanks.


It still seems weird that they can't make retrospective adjustments (not as if they send individual payments to revenue for each contributor) but ,given their incompetence with the big stuff, it's no surprising they can't handle anything small that's out of routine.

Of course they could make those adjustments but they won't because it's too much like hard work  >:(
I think I read that it's an issue the contributor has to take up with the IRS.
Yes, that is indeed their position but only because it is their position and they don't have the imagination or competence to handle the matter like a professional organisation.  No doubt withholding tax is sitting in their account earning interest in the meantime...

Micky_Mango

« Reply #18 on: June 09, 2015, 00:50 »
+8
Although IS have been woefully ill prepared for changes in the past it is hard to fault how they handled the new payment and tax changes, with months of emails and forum posts explaining the upcoming changes. To call them incompetent on this issue is a bit unfair, and to take no responsibility yourself is a bit rich IMHO. Did you not read any of the information or emails regarding the changes? They were made very clear, and it's hard to see what more they could have done. Sometimes we have to take a bit of responsibility ourselves. On top of this, the amounts you are talking about must be very small, you have 300 sales at IS in 6 years so not a great deal in terms of money. You are also presumably aware that if your income is taxed once ( ie. you are taxed in US on your income from US) you won't be taxed on it again in the UK? This is sounding like a very small storm in a teacup.

« Reply #19 on: June 09, 2015, 05:39 »
0
AS I understand it, although the interview was / is conducted through the iStock website, the arrangement whereby you are not liable to pay US taxes is actually directly between you as an individual or company, and the American IRS. It's nothing as such to do with iStock itself. The IRS then gives iStock permission to pay you the full amount without the witholding tax being taken.
iStock can't just pay the full amount to you without permission from the IRS or they would become liable for the tax money.

« Reply #20 on: June 09, 2015, 17:16 »
-1
Although IS have been woefully ill prepared for changes in the past it is hard to fault how they handled the new payment and tax changes, with months of emails and forum posts explaining the upcoming changes. To call them incompetent on this issue is a bit unfair, and to take no responsibility yourself is a bit rich IMHO. Did you not read any of the information or emails regarding the changes? They were made very clear, and it's hard to see what more they could have done. Sometimes we have to take a bit of responsibility ourselves. On top of this, the amounts you are talking about must be very small, you have 300 sales at IS in 6 years so not a great deal in terms of money. You are also presumably aware that if your income is taxed once ( ie. you are taxed in US on your income from US) you won't be taxed on it again in the UK? This is sounding like a very small storm in a teacup.
I have said earlier that failing to do the tax interview was on me (taking responsibility).  Also true that we are talking about a trivial sum of money.  However, in principle, the mechanics of the situation are that money is moved from the contributor to a pot of money for revenue which is paid out at various points in time but will always have some funds there.  Where a deduction should not have made (for whatever reason) it should be a simple matter to debit one account and credit the other - this is how companies (even American ones as I happen to be employed by one) operate. So, notwithstanding my error, I stand over my statement that there is a lack of competence and imagination involved by IS.  This is the very same IS who feels that its FAQ takes precedence over the contract it enters into with its contributors.
« Last Edit: June 09, 2015, 17:20 by heywoody »

Micky_Mango

« Reply #21 on: June 10, 2015, 03:53 »
+7
Although IS have been woefully ill prepared for changes in the past it is hard to fault how they handled the new payment and tax changes, with months of emails and forum posts explaining the upcoming changes. To call them incompetent on this issue is a bit unfair, and to take no responsibility yourself is a bit rich IMHO. Did you not read any of the information or emails regarding the changes? They were made very clear, and it's hard to see what more they could have done. Sometimes we have to take a bit of responsibility ourselves. On top of this, the amounts you are talking about must be very small, you have 300 sales at IS in 6 years so not a great deal in terms of money. You are also presumably aware that if your income is taxed once ( ie. you are taxed in US on your income from US) you won't be taxed on it again in the UK? This is sounding like a very small storm in a teacup.
I have said earlier that failing to do the tax interview was on me (taking responsibility).  Also true that we are talking about a trivial sum of money.  However, in principle, the mechanics of the situation are that money is moved from the contributor to a pot of money for revenue which is paid out at various points in time but will always have some funds there.  Where a deduction should not have made (for whatever reason) it should be a simple matter to debit one account and credit the other - this is how companies (even American ones as I happen to be employed by one) operate. So, notwithstanding my error, I stand over my statement that there is a lack of competence and imagination involved by IS.  This is the very same IS who feels that its FAQ takes precedence over the contract it enters into with its contributors.
IS have many tens of thousands of contributors, do you really expect them to start making individual adjustments to the many thousands who doubtless failed to take any notice of the many weeks of reminders of forum posts and emails, to pay back tiny amounts of money to people who couldn't be bothered to keep an eye on their own businesses? As I said before, there is a principle in taxation that you are only taxed once on income, so any tax IS have deducted won't be a million miles from what you would have paid in your own country, where you won't have to pay tax a second time on the already taxed income, so really, you are using a tiny tiny stick to beat IS when the fault lies with you anyway. How much are we talking about? A few dollars? I'm the first in line to criticise IS when the deserve it, but in this case the lack of competence and imagination is down to you buddy. Perhaps you should also read Difydave's post too, where he states "The IRS then gives iStock permission to pay you the full amount without the witholding tax being taken.
iStock can't just pay the full amount to you without permission from the IRS or they would become liable for the tax money. "
« Last Edit: June 10, 2015, 03:58 by Micky_Mango »

« Reply #22 on: June 10, 2015, 07:21 »
+4
Although IS have been woefully ill prepared for changes in the past it is hard to fault how they handled the new payment and tax changes, with months of emails and forum posts explaining the upcoming changes. To call them incompetent on this issue is a bit unfair, and to take no responsibility yourself is a bit rich IMHO. Did you not read any of the information or emails regarding the changes? They were made very clear, and it's hard to see what more they could have done. Sometimes we have to take a bit of responsibility ourselves. On top of this, the amounts you are talking about must be very small, you have 300 sales at IS in 6 years so not a great deal in terms of money. You are also presumably aware that if your income is taxed once ( ie. you are taxed in US on your income from US) you won't be taxed on it again in the UK? This is sounding like a very small storm in a teacup.
I have said earlier that failing to do the tax interview was on me (taking responsibility).  Also true that we are talking about a trivial sum of money.  However, in principle, the mechanics of the situation are that money is moved from the contributor to a pot of money for revenue which is paid out at various points in time but will always have some funds there.  Where a deduction should not have made (for whatever reason) it should be a simple matter to debit one account and credit the other - this is how companies (even American ones as I happen to be employed by one) operate. So, notwithstanding my error, I stand over my statement that there is a lack of competence and imagination involved by IS.  This is the very same IS who feels that its FAQ takes precedence over the contract it enters into with its contributors.


The taxman wants the tax due to him. iStock arranged for YOU to get YOUR waiver (or whatever it is called, it's an official IRS document) to not pay the tax through their website. This saved anyone who did the interview from having to contact the IRS directly and sort it out themselves to get it.
It worked OK for the vast majority of people, which is pretty good when you consider that there are at least four sets of people involved, you, iStock, the US IRS, and your own domestic tax
service.
I'm certainly not an iStock woo-yayer, but it seems to me that they got this right. Also I have never known iStock be anything but completely straightforward when it comes to actual payments. If it's actually owed to you then it will get paid. Sometimes not straight away, but that's typical of big business dealing with small payments,


It really isn't as simple as just shuffling the money around internally. As already said iStock would be liable for the tax themselves.

« Reply #23 on: June 10, 2015, 18:43 »
+1
Although IS have been woefully ill prepared for changes in the past it is hard to fault how they handled the new payment and tax changes, with months of emails and forum posts explaining the upcoming changes. To call them incompetent on this issue is a bit unfair, and to take no responsibility yourself is a bit rich IMHO. Did you not read any of the information or emails regarding the changes? They were made very clear, and it's hard to see what more they could have done. Sometimes we have to take a bit of responsibility ourselves. On top of this, the amounts you are talking about must be very small, you have 300 sales at IS in 6 years so not a great deal in terms of money. You are also presumably aware that if your income is taxed once ( ie. you are taxed in US on your income from US) you won't be taxed on it again in the UK? This is sounding like a very small storm in a teacup.
I have said earlier that failing to do the tax interview was on me (taking responsibility).  Also true that we are talking about a trivial sum of money.  However, in principle, the mechanics of the situation are that money is moved from the contributor to a pot of money for revenue which is paid out at various points in time but will always have some funds there.  Where a deduction should not have made (for whatever reason) it should be a simple matter to debit one account and credit the other - this is how companies (even American ones as I happen to be employed by one) operate. So, notwithstanding my error, I stand over my statement that there is a lack of competence and imagination involved by IS.  This is the very same IS who feels that its FAQ takes precedence over the contract it enters into with its contributors.
IS have many tens of thousands of contributors, do you really expect them to start making individual adjustments to the many thousands who doubtless failed to take any notice of the many weeks of reminders of forum posts and emails, to pay back tiny amounts of money to people who couldn't be bothered to keep an eye on their own businesses? As I said before, there is a principle in taxation that you are only taxed once on income, so any tax IS have deducted won't be a million miles from what you would have paid in your own country, where you won't have to pay tax a second time on the already taxed income, so really, you are using a tiny tiny stick to beat IS when the fault lies with you anyway. How much are we talking about? A few dollars? I'm the first in line to criticise IS when the deserve it, but in this case the lack of competence and imagination is down to you buddy. Perhaps you should also read Difydave's post too, where he states "The IRS then gives iStock permission to pay you the full amount without the witholding tax being taken.
iStock can't just pay the full amount to you without permission from the IRS or they would become liable for the tax money. "


Here's the thing, "buddy".  A well designed IT system would accommodate this situation automatically either by holding payments pending completion of the tax form or by auto adjusting balances.  Not everyone lives on their forum or waits with bated breath to read the next bit of spam they issue in case it has something significant to say. 

« Reply #24 on: June 11, 2015, 05:12 »
+3
A well designed IT system would accommodate this situation automatically either by holding payments pending completion of the tax form or by auto adjusting balances.

Not necessarily. Systems are defined by the rules which they implement (using rules here in the systems-analytical sense). Unless you know those rules you are not in a position to judge whether a system is well designed or not. The rules of this system are likely constrained by two potentially overlapping sets of requirements - i.e. IRS process  / regulation and the contractual obligation to pay.

{Also _  This is just like -> if you were to overpay on the PAYE system in Ireland (or the UK) you would have to claim it back from the government. Not from the employer.}


 

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