W9 and Tax issues

Now I'm sure this has been hashed on here before, but I'm having issues finding something regarding it using the search function. How exactly do all these W9's that we fill out for all these freebie sites affect our filing of income taxes. I have a feeling that I'm going to owe back taxes if I don't do anything about it ahead of time. Anyone have some answers at all?

A W9 is just a Taxpayer Identification document. It is not sent to the IRS, it is kept on file by the freebie site so they know where to send your 1099-MISC come tax filing time.

Legally, you are required to claim gifts in excess of $600 on your income taxes (and that's TOTAL gifts, not individual gifts of $600, like some people would have you believe). The W9 provides the freebie site with your SSN so they can issue a 1099-MISC for you to include with your taxes. The freebie site is legally obligated to do this, and it also allows them to deduct the values of all payouts as business expenses, so it's in their best interest both legally and financially to do it.

If you want the freebies, you have to be prepared for the taxes.

I've actually been contemplating the idea of paying taxes on my feebies recently as well. I knew that I would have to, and I kinda understand how much I will have to pay depends on how much I make blah blah blah...but I actually have some other questions along the lines of taxes.

1) Will the freebie company or the IRS send me a form or something informing me to claim teh 1099-MISC, or will I just have to know...?

2) I'm assuming that I will be claiming this as "miscellaneous" on my taxes, rather than something else, correct?

haha, i just don't want to get audited by those jerkfaces

I too don't understand in the slightest how this works... could someone please explain in detail how we are to go about claiming these "gifts." Maybe an estimate of how much we are actually going to be paying (from our return). Thanks in advanced.

[quote8b36180557="mistertomlinson"]I too don't understand in the slightest how this works... could someone please explain in detail how we are to go about claiming these "gifts." Maybe an estimate of how much we are actually going to be paying (from our return). Thanks in advanced.[/quote8b36180557]

Since nobody ever bothers to remember that we would have no idea what to estimate your tax position to be... just go ahead and put 40% of the value of that item in a savings account. That way, you'll have plenty to cover what the tax may be, and you might earn a little extra.

Sorry for the slight flame, but folks need to realize that we can't guess at what you will owe, nor do we want to lead you to believe that any of us do.

[quote516e3cf654="mistertomlinson"]Maybe an [b516e3cf654]estimate[/b516e3cf654] of how much we are actually going to be paying (from our return). Thanks in advanced.[/quote516e3cf654] I wasn't asking for someone to do my taxes and only needed a rough idea... for Christ's sake, I'm sure there are a ton of people who have gotten free gifts of all different values and remember exactly how much they paid... it should have been obvious that this is the kind of response I was expecting... and 40% is retarded...

[quoteae7a68a0c3="mistertomlinson"][quoteae7a68a0c3="mistertomlinson"]Maybe an [bae7a68a0c3]estimate[/bae7a68a0c3] of how much we are actually going to be paying (from our return). Thanks in advanced.[/quoteae7a68a0c3] I wasn't asking for someone to do my taxes and only needed a rough idea... for Christ's sake, I'm sure there are a ton of people who have gotten free gifts of all different values and remember exactly how much they paid... it should have been obvious that this is the kind of response I was expecting... and 40% is retarded...[/quoteae7a68a0c3]

It's all based on how much you earn.

Since we don't know that, there's no way for anyone to estimate how much you'll be paying.

Well then, I guess... [quotea3b503329d="mistertomlinson"]I too don't understand in the slightest how this works... could someone please explain in detail how we are to go about claiming these "gifts."[/quotea3b503329d]
)

If you make under $7k, you probably won't have to pay much, if any.

[quotef329767cb6="mistertomlinson"]Well then, I guess... [quotef329767cb6="mistertomlinson"]I too don't understand in the slightest how this works... could someone please explain in detail how we are to go about claiming these "gifts."[/quotef329767cb6]
)[/quotef329767cb6]

[quotef329767cb6="dmorris68"]A W9 is just a Taxpayer Identification document. It is not sent to the IRS, it is kept on file by the freebie site so they know where to send your 1099-MISC come tax filing time.

Legally, you are required to claim gifts in excess of $600 on your income taxes (and that's TOTAL gifts, not individual gifts of $600, like some people would have you believe). [bf329767cb6]The W9 provides the freebie site with your SSN so they can issue a 1099-MISC for you to include with your taxes.[/colorf329767cb6][/bf329767cb6] The freebie site is legally obligated to do this, and it also allows them to deduct the values of all payouts as business expenses, so it's in their best interest both legally and financially to do it.

If you want the freebies, you have to be prepared for the taxes.[/quotef329767cb6]

You'll get a 1099-MSC form to fill out. You claim how much you've received as gifts as long as it totals over $600 from one person/company etc. It's not just money you've received, it's the total value of everything you've received (including sexual favours).

[quote6b4bacf4b5="tylerc"]If you make under $7k, you probably won't have to pay much, if any.[/quote6b4bacf4b5]

SWEET!

I guess there [b6b4bacf4b5][i6b4bacf4b5]is[/i6b4bacf4b5][/b6b4bacf4b5] an advantage to be retarded and poor after all!

[quote822b040c79="mistertomlinson"][quote822b040c79="mistertomlinson"]Maybe an [b822b040c79]estimate[/b822b040c79] of how much we are actually going to be paying (from our return). Thanks in advanced.[/quote822b040c79] I wasn't asking for someone to do my taxes and only needed a rough idea... for Christ's sake, I'm sure there are a ton of people who have gotten free gifts of all different values and remember exactly how much they paid... it should have been obvious that this is the kind of response I was expecting... and 40% is retarded...[/quote822b040c79]

Okay, since their tax situation is exactly the same as yours, they should be able to give you an estimate.

And why is 40% retarded? At the end of the fiscal year, the tax is more than covered, and you've earned some interest on your money.

[quote1eda0e50a7="dmorris68"]Legally, you are required to claim gifts in excess of $600 on your income taxes (and that's TOTAL gifts, not individual gifts of $600, like some people would have you believe). The W9 provides the freebie site with your SSN so they can issue a 1099-MISC for you to include with your taxes. The freebie site is legally obligated to do this, and it also allows them to deduct the values of all payouts as business expenses, so it's in their best interest both legally and financially to do it.[/quote1eda0e50a7]

To clarify
a) an individual (such as yourself) is required to report [b1eda0e50a7]all[/b1eda0e50a7] earnings to the IRS, not just those over $600. Though there is a legal and moral obligation, most people choose not to self-report gifts under $600.
b) a legal entity (such as a freebie site) is only supposed to collect name, ssn, address, etc if they send $600 or more (it's $600 or more, not $600.01 or more as some would lead you to believe) in a calendar year to a single entity which is not a corporation. they are supposed to collect that information so they can say to the IRS, "hey guys I sent $x to ssn 123456789, make sure that he reports it on his income tax return. i swear i'm not keeping the money for myself and attempting to evade taxation!". one thing to note is that it is technically not required for a freebie site to collect a w-9. they can choose to pay the taxes on that money "on your behalf" - but doing so would sink most freebie sites as 30% or even 15% is a pretty significant portion of their margin.

if the freebie site DOES collect a W-9 and DOES elect to report the money as sent to the entity specified on the W-9 (i.e. you), then it is compulsory for them to provide you with a 1099-MISC by january 31st of the year following the gift disbursement.

basically, the rule of thumb is this
$600 or more FROM a single SSN/EIN (e.g. of a freebie site) TO a single SSN/EIN (e.g. of a user, partnership, or anything but a corporation) in a calendar year requires a W-9.

so when you see a big DIY site not collecting W-9s when you complete multiple sites, they may be okay if each site is its own business with a fictitious business name and an EIN.

another thing to keep in mind you are pretty much safe from trouble if the freebie site doesn't have your W-9. but if they do and they report the money to the IRS, you better report it on your 1040 or they WILL find you and kick your ass - it may take 10 years, but they will get you. if you are doing your own taxes with tax prep software (which i highly recommend, its not that hard) the software should ask you if you received any 1099-MISCs and walk you through importing that data. i know turbotax does this. if you are not doing your own taxes, you should be safe if you give your 1099-MISC(s) to the person/company who is.

and a last note- it is reasonable for a freebie site to ask for a W-9 even if your earnings do not exceed $600 in a calendar year and report it anyway. i don't know if any of them do, but it is legal, and some might even call it 'prudent'.

GOD DAMN, that's a hell of an answer. ++KRM!!!

Screw Tax Brackets! I would only get $600 if I did DOYD for $1100 (

Oh my god. Its a good thing I have my mom do all the tax stuff...I dont even know what W9 means!!