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I was thinking about starting an Affiliate program
where i would pay affiliates for promoting products.
Problem is i don't know how this is done as far as *If* i'm supposed to gather the affiliates information/social # etc. and then report that to the government.
Q1. And well, I was wondering when you guys pay Affilates, how does this work as far as *IF* i'm supposed to gather their info and social # of each one and report that?
I'm in California, USA and as far as i know, i think that when u pay someone i think your supposed to report the social security # of anyone you pay. (they promote your product and you pay them a commission.)
Are they supposed to be acting as *independent contractors that you pay? Not sure how this really works. I have never ran an Affiliate program and would like to know what i'm supposed to do as far as if i'm supposed to get their info, social # etc and then report
Q2. To you guys that Run Affiliate programs and pay others (your affiliates),
*Do u just pay your affiliates/members and that's it?
Or do You or "Are you supposed to" collect their social and other data. How is this done?
In need your guy's help. I'd like to hear from someone who has or is running an Affiliate program and is paying his or her affiliates.
Thanks for the help guys:)
I really appreciate the help.
Personally I would not get a specialised lawyer or accountant in just for this. Your usual business accountant should be fine.
Read the IRS website as well - there is a wealth of useful information there - and if in doubt about any of that telephone them during office hours and they should be able to explain things.
The best option may well be for you to use an established affiliate network. This saves you all the paperwork and accounting associated with running the programme yourself as well as providing you with exposure to a large number of potential affiliates.
Thanks alot mfishy, purplecape, and vincevincevince
for the great information:)
I'll need to look into all of it as soon as
I researched and i have a few other questions. I read that you are supposed to make sure the person you pay is able to be paid by being/acting as an independent contractor. And i think that he is supposed to be checked out somehow before you can even use the person as an affiliate and pay them.
Q.1. Does the governement do this for you and then confirm that u can indeed use the person as an affiliate and pay them?
Q2. How long does that take?
Q3. Also, i've seen some sites that sell membership type scripts that say that u can instantly add affiliates into them and then pay them.
> How could anyone start mass marketing a site with affiliates if u have to check out every single person before they can even do anything let alone begin paying them? Would'nt that take forever?
Q.4 Any ideas how that is done quickly or is this a slow process
for each person being checked out?
Well, thanks again guys for all your answers:)
In the US, the gov't does NOT check people out in the way you asking. You need to have your affiliates fill out a form, either electronically or on paper, saying who they are and stating what their tax status is. You would then need to issue 1099s to them at the end of the year if they had earned over $600, and tell the IRS which of your affiliates had income of over $600, and exactly how much it was for each of them.
But like I said, go to the IRS web site. They have many helpful documents. I'd assume the UK Inland Revenue site provides similar info for the UK....
The network functions as the trusted third party and handles all of the affiliate financial matters, including tax reporting, issuing 1099's and making payments.