Tax Tips for Affiliate Networks, App Monetization Networks, and Employers Hiring Independent Contractors
Working with affiliates, publishers, or independent contractors allows businesses to grow while offering both the payer and payee the maximum amount of flexibility. But it can also be a hassle when tax season rolls around. Before you get stuck with mountains of paperwork or forget any important legal steps, here are some tips on how to stay in compliance, while reducing workload to a minimum.
Don’t Forget Your W-9
The most important first step for affiliate networks, advertisings networks, or any business using independent contractors, is to collect a W-9 form for each payee. This form is a legal requirement for any payer making payments to affiliates, suppliers, or independent contractors Luckily, some payout platforms automatically collect W9 forms from payees, and keep track of each payment made. If you do not have a platform that does this, consider investing in one to save yourself time and reduce the risk of non-compliance.
Know What Work Requires a W-9
If you make payments that amount to more than $600 per year per affiliate or independent contractor, you must collect a W-9 form and submit a 1099-MISC at the end of the year. All affiliates, publishers, or independent contractors that make more than $600 working for a company must pay taxes on those earnings.
Keep Track of Mass Payments
Payment systems aren’t just for keeping track of tax documents. These systems ensure that none of your payees slip through the cracks and miss tracking payments. This is not only beneficial for your business, providing you with accurate information on expenses for your taxes, but it is beneficial for your independent contractors, who can ask you how much you paid them over the course of a year. It is sometimes difficult for independent contractors to keep track of how much they earn, especially if they work for more than one company. Having a payout platform that keeps track is beneficial for all parties involved and makes tax season a breeze.