subject: Affiliate Marketing Management Taxes - FAQ [print this page] Affiliate marketing management requires attention to detail, the ability to multi-task and the ability to plan long term. One of the more important aspects of the job involves taxes. The affiliate marketing management team must successfully, accurately, and consistently tracks affiliate tax information over the course of the year. Miss one person and it could cost the company millions.
Here we will answer the most frequently asked questions regarding taxes.
Do I need to send a 1099 to everyone?
While state laws may vary, federal law requires you to send a 1099 to any United States citizen whom you paid more than $600. It is up to you if you wish to send a 1099 to anyone that you paid less than $600.
What about foreign citizens or companies?
The forms are different for foreign citizens and companies, but the $600 limit is the same. You will be required to send a 1042 to all non-U.S. citizens whom you paid over $600.
When do I need to collect a W9?
There is no required time to collect a W9. However, it is highly recommended to get a W9 before you ever pay anyone. If the person or company never receives pay in excess of $600, it does not hurt anything. However, if you pay a person over $600 and you do not have it, then you will be responsible for taxes on that money.
Do I need to do the same for foreign citizens and companies?
The same does apply to foreign citizens. The difference lies in the paperwork. Instead of a W9, the affiliate will need to fill out and sign a W8.
Does the affiliate have to mail the W9/W8 in? or will a fax work?
While you can have the affiliate mail or fax the document, the federal government now allows for digital signatures. Therefore, you can send the paperwork via e-mail and the person can digitally sign the document.
A digital signature is just as legal as a written signature but it is easier to keep track of a digital file than a physical file. Therefore, we recommend the use of a digital signature.
Doesn't my affiliate program track that information?
Sometimes the affiliate network does track this information. Sometimes they do require a W9/W8 filled out before allowing people to join. However, many also allow the affiliate to change the information at will and it may not be signed.
Additionally, many programs that require the information do not verify the information is correct. Therefore, you can be stuck with an affiliate who put all ones in for their social security number.
It is highly recommended you track all the information yourself or with software.
How does the software help?
Software acts as a safeguard to the system. Before you pay your affiliates, you run the mass pay file through the software program. It verifies all the information and sends you an approved affiliate list. You take the list and import it to your mass pay system.
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