Laymen info on running an in-house affiliate program [taxes]

running affiliate program taxes

[kisk]

I've setup an in-house affiliate program but have yet to make it live because I want to have all the information about running an affiliate program, mainly concerning taxes.

From what I've read you really only need to collect in-depth affiliate information if the affiliate is gaining $600+/year.

Now I've looked over the IRS site and must say it isn't organized or spoken in the language of most people. We're a new business and don't yet have a lawyer (and can't afford one! lol). Can you guys give some links to sites that offer information about what needs to be done (tax and legally wise) when setting up an affiliate program?

thanks!
kisk

[phaze]

All I know so far is that you're required to issue a 1099 form if your affiliate earns more than $600/year. Do any affiliates withold taxes like an employer? That sure would be a nightmare if it's the case. I hope and suspect you can just issue a 1099 without witholding taxes and leave the affiliate to take care of their own tax issues.

[kisk]

I'm pretty sure you don't have to withhold taxes for affiliates and that they take care of the taxes themselves. Otherwise you'd mostly be dealing with W-2's.

I made $9,000 as an affiliate of a certain company last year and they never withheld anything. I did have to pay the full taxes on it.

Anybody else reading that knows of a site where I might find general (and more in-depth) information on this? -- Besides the IRS of course.

Thanks