Author Topic: Photodune Tax Problems. (Read 9144 times)

Desintegrator · « **on:** October 01, 2016, 16:04 »

Hi!
I was trying to fill the tax forms for Photodune. I'm not a US citizen, but with my country of residence i get 0% witholding on all sites.

Photodune wants me to add a tax identification number otherwise the witholdin stays.
Isn't there any other option? There is no other site were I had to give tax ID number, and my tax forms are OK everywhere else.

Any advice?

Noedelhap · « **Reply #1 on:** October 01, 2016, 16:22 »

To the right of the third option is the option Foreign Tax ID number. Select that and enter your own country's tax number (often your personal social security number).

Desintegrator · « **Reply #2 on:** October 01, 2016, 16:38 »

Quote from: Noedelhap on October 01, 2016, 16:22

To the right of the third option is the option Foreign Tax ID number. Select that and enter your own country's tax number (often your personal social security number).

Yes, I see that, I'm just wondering why shout I give that to Envanto, when no other site needed that to solve the tax withholding issue.
Normally I just proved which country i am from, and that was it, no need for any Id number

Desintegrator · « **Reply #3 on:** October 01, 2016, 16:41 »

But there's more...
In October I had 2 sales so far. Tax is withheld in both cases. (And why is the amount that high??!!)

According to the earnings page, the two sales came from Canada and Germany! Why is that amount held back? Am I being screwed here?

I don't understand this.. Am I actually ending up with 41 cents after a medium sale which costs $3?!

Desintegrator · « **Reply #4 on:** October 01, 2016, 16:56 »

How can $42 of tax be withheld when I receive $25? That's 62% tax being withheld from sales from which not every one went to the US... I'm confused.

Noedelhap · « **Reply #5 on:** October 01, 2016, 18:11 »

Quote from: Desintegrator on October 01, 2016, 16:38

Quote from: Noedelhap on October 01, 2016, 16:22
To the right of the third option is the option Foreign Tax ID number. Select that and enter your own country's tax number (often your personal social security number).

Yes, I see that, I'm just wondering why shout I give that to Envanto, when no other site needed that to solve the tax withholding issue.
Normally I just proved which country i am from, and that was it, no need for any Id number

Apparently they need your foreign tax number to determine whether you are paying taxes in your own country. Some agencies don't need it, some do.

I see that fees are also being withheld. I'm not familiar with Photodune but these fees are probably transaction fees? I think you should contact their support center.

SpaceStockFootage · « **Reply #6 on:** October 01, 2016, 23:27 »

To benefit from the tax treaty they want to know that you're going to be paying tax in your own country, so that at least one of the countries in the tax treaty is going to seeing some tax from any sales. As a result, you should have some kind of tax identification number that you can provide to show that you're a taxpayer in your own country.

If you don't fill out the W8 then it;s assumed you're a US author and you have 28% withheld from all sales. If you fill out a W8 but without a tax ID number... then they take 30% from all US sales and nothing from all non-US sales. If you fill out the W8 with a valid tax ID, and your country has a 0% tax treaty, then you won't have anything subtracted from any of your sales. Well, taxes anyway.

Not sure why most other sites don't ask for the ID number. There is a box to enter your tax ID on the actual physical form, so I'm not sure why a lot of places are leaving that out.

As for the $25 thing... I'm guessing you're a non-exclusive author, as the fees you've had subtracted are pretty high? If you sort the tax thing out, then you'd be getting about $55 rather than $25. And if you go exclusive (and sort the tax thing out) then you'll be getting about $75 rather than $55.

Desintegrator · « **Reply #7 on:** October 02, 2016, 03:13 »

Quote from: SpaceStockFootage on October 01, 2016, 23:27

As for the $25 thing... I'm guessing you're a non-exclusive author, as the fees you've had subtracted are pretty high? If you sort the tax thing out, then you'd be getting about $55 rather than $25. And if you go exclusive (and sort the tax thing out) then you'll be getting about $75 rather than $55.

The tax they have been withholding is higher than my actual earnings... How can that be? Why do they put tax withholding on money that I don't even earn?
I'm ending up with 41 cents from a $3 sale. That's 13,6%! Before subtracting 30% that would be 19,5%...

sharpshot · « **Reply #8 on:** October 02, 2016, 05:44 »

I found it more straightforward to deactivate my portfolio

Don't really want to deal with sites that make life complicated. There's enough sites that are much more straightforward and I see no reason why Envato can't act like they do.

SpaceStockFootage · « **Reply #9 on:** October 02, 2016, 06:39 »

"Why do they put tax withholding on money that I don't even earn?"

Yeah, nobody's quite figured that out yet!

increasingdifficulty · « **Reply #10 on:** October 02, 2016, 07:12 »

Quote from: Desintegrator on October 01, 2016, 16:38

Yes, I see that, I'm just wondering why shout I give that to Envanto, when no other site needed that to solve the tax withholding issue.
Normally I just proved which country i am from, and that was it, no need for any Id number

I may be strange, but I find it quite reasonable to give out every piece of detail about who you are to someone who pays you money. It's normal in every other aspect of life, so why not here?

I see so many d*** thieves in the stock business selling stolen tracks, images and video clips that I welcome all forms of ID verification, tax numbers and anything else that can make it just a little bit more difficult for the idiots who think it's a good idea to make money off of someone else's work.

SpaceStockFootage · « **Reply #11 on:** October 02, 2016, 07:34 »

Yeah, I'm kinda with you on that one. Would be interesting to see the results if all stock marketplaces and freelancing sites required proof of Photoshop/After Effects licenses to contribute. I'm sure I'd have quite a bit less competition!

Tror · « **Reply #12 on:** October 02, 2016, 09:11 »

Quote from: SpaceStockFootage on October 02, 2016, 06:39

"Why do they put tax withholding on money that I don't even earn?"

Yeah, nobody's quite figured that out yet!

They calculate the full sales price (including their commission) as your income and consequently you get 28% withheld of the sales price - not only of your commission. After that, additionally, they take their "share" as commission from the sales price and you are left with the rest.

If you supply a Tax ID from "whereever", the states or international, you have a hight chance that due to the FATCA agreement the US will report later the TOTAL of Envatos income of a sale (including their "commission") as YOUR income to your local Tax office which will get you Audited or bring even more trouble.

I understand that some really make money their buuuuuuuut......seriously, everybody with some self respect left should stop submitting to "companies" like Envato or, better, delete their Port there.

Desintegrator · « **Reply #13 on:** October 02, 2016, 10:29 »

Quote from: Tror on October 02, 2016, 09:11

Quote from: SpaceStockFootage on October 02, 2016, 06:39
"Why do they put tax withholding on money that I don't even earn?"

Yeah, nobody's quite figured that out yet!

They calculate the full sales price (including their commission) as your income and consequently you get 28% withheld of the sales price - not only of your commission. After that, additionally, they take their "share" as commission from the sales price and you are left with the rest.

If you supply a Tax ID from "whereever", the states or international, you have a hight chance that due to the FATCA agreement the US will report later the TOTAL of Envatos income of a sale (including their "commission") as YOUR income to your local Tax office which will get you Audited or bring even more trouble.

I understand that some really make money their buuuuuuuut......seriously, everybody with some self respect left should stop submitting to "companies" like Envato or, better, delete their Port there.

Now I'm seriously thinking about this. Back in the past I used to a earn a solid $150/month there. I kept submitting and now I earn only a small fraction of that. And this commission system seems to be a joke.

SpaceStockFootage · « **Reply #14 on:** October 02, 2016, 10:53 »

Quote from: Tror on October 02, 2016, 09:11

Quote from: SpaceStockFootage on October 02, 2016, 06:39
"Why do they put tax withholding on money that I don't even earn?"

Yeah, nobody's quite figured that out yet!

They calculate the full sales price (including their commission) as your income and consequently you get 28% withheld of the sales price - not only of your commission. After that, additionally, they take their "share" as commission from the sales price and you are left with the rest.

If you supply a Tax ID from "whereever", the states or international, you have a hight chance that due to the FATCA agreement the US will report later the TOTAL of Envatos income of a sale (including their "commission") as YOUR income to your local Tax office which will get you Audited or bring even more trouble.

I understand that some really make money their buuuuuuuut......seriously, everybody with some self respect left should stop submitting to "companies" like Envato or, better, delete their Port there.

You're kind of right. The fees that they charge are split into two. The buyers fee and the authors fee. The buyers fee is subtracted from the total price (the list price) to give the item price. The authors fee and any taxes are then calculated on the item price.

Thankfully I'm a UK taxpayer so I don't get anything withheld. However, if I did get taxed, then I'm assuming the best course of action would be to report income as the item price, and then report the authors fee as an outgoing. I can't see any tax authorities having much of a problem with that seeing as we never see the authors fee.

Still, it's not exactly straightforward. However, I find it slightly more likely that what they're doing is correct, rather than some complicated and convoluted tax swizz that's completely incorrect and/or borderline fraud.

I could be wrong.

increasingdifficulty · « **Reply #15 on:** October 02, 2016, 13:17 »

Quote from: Tror on October 02, 2016, 09:11

I understand that some really make money their buuuuuuuut......seriously, everybody with some self respect left should stop submitting to "companies" like Envato or, better, delete their Port there.

Sure, I'm sure there are plenty of Wordpress authors willing to give up $50,000 a month for that precious self respect...

angelawaye · « **Reply #16 on:** October 02, 2016, 19:50 »

I'm a us citizen and last year when they counted "their cut" in my earnings, I deactivated my images. Why should we have to claim their income (share) on our tax return?

Watch out because Creative Market does this too ... Good luck!

Tror · « **Reply #17 on:** October 03, 2016, 07:24 »

Quote from: increasingdifficulty on October 02, 2016, 13:17

Quote from: Tror on October 02, 2016, 09:11
I understand that some really make money their buuuuuuuut......seriously, everybody with some self respect left should stop submitting to "companies" like Envato or, better, delete their Port there.

Sure, I'm sure there are plenty of Wordpress authors willing to give up $50,000 a month for that precious self respect...

Slave mentality. If I make 50k per month with wordpress themes I have enough self confidence to move elsewhere and value my work. Even if I lose some sales or earn half on another site I would feel better. Not every personality has a price tag - or at least not that low

increasingdifficulty · « **Reply #18 on:** October 03, 2016, 07:33 »

Quote from: Tror on October 03, 2016, 07:24

Slave mentality. If I make 50k per month with wordpress themes I have enough self confidence to move elsewhere and value my work. Even if I lose some sales or earn half on another site I would feel better. Not every personality has a price tag - or at least not that low

It's called being where the customers are and the money is. With your reasoning and logic no artist in the world should sell their music at iTunes since a track costs $0.99 and an album goes for half of what it used to. Yet, somehow they still do.

You don't have this problem with Shutterstock? Envato images are more expensive than SS.

SpaceStockFootage · « **Reply #19 on:** October 03, 2016, 07:40 »

And you do realise that WordPress authors are welcome to price their themes at whatever they like. If they'll sleep better at night having a theme that costs $10,000 then they're more than welcome to price them accordingly. I mean, they won't get any sales and won't be able to pay the bills... but at least they won't have a slave mentality, right?

SpaceStockFootage · « **Reply #20 on:** October 03, 2016, 08:19 »

One dude gets over $200,000 a month there, from his one WordPress theme. But I'm sure he'd feel infinitely better if he was earning half that somewhere else. Before you could set your own prices, his theme was $59. Now he can set his own prices, he's put it up to $60. Probably because he knows he's onto a good thing, and that's pretty much what it should have been priced at.

Maybe he'll experiment more with prices, moving forward (if he can get more per sale and not take a hit on overall revenue, then good for him), but I'm sure like most people.... he'd rather get a bit of something than a lot of nothing. The higher he puts the price the closer he gets to the realms of custom site prices, and the whole idea of stock assets is that it saves a lot of time and money.

But is he a slave, even if it was priced at $30 or $15? I think the general timescale for creating a theme is three months for a one man band. Let's say his took six months as it's obviously of a high standard. So that makes around 1000 hours of work. So even if it was selling for $15, he's now made $2677 for every hour that he's put in. Doesn't sound like slave wages to me! But it's not... it's selling for $60, so he's made over $10k per hour. Is that not good enough? Is that price tag insufficient? Should he be getting $20k or $50k an hour before he can walk down the street with his head held high.

As a side note, I appreciate he will have had to put a lot of time into updates and support, but still... $250k a month would make it pretty worthwhile.

angelawaye · « **Reply #21 on:** October 04, 2016, 10:16 »

*, I need to get into the Wordpress theme market ...

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Author Topic: Photodune Tax Problems. (Read 9144 times)

Desintegrator

Noedelhap

Desintegrator

Desintegrator

Desintegrator

Noedelhap

SpaceStockFootage

Desintegrator

sharpshot

SpaceStockFootage

increasingdifficulty

SpaceStockFootage

Tror

Desintegrator

SpaceStockFootage

increasingdifficulty

angelawaye

Tror

increasingdifficulty

SpaceStockFootage

SpaceStockFootage

angelawaye

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