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Tax Question

03-18-2010, 05:53 PM
#1
Joined: Sep 2009
Posts: 330
Tax Question

I am an Individual Developer, my name is under Seller, though my payments from Apple are going to someone elses bank account. Will I still be expected to pay the taxes? Or will the person receiving the payments be expected to pay the taxes?

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03-18-2010, 06:45 PM
#2
Who's keeping the revenue? That's the party that SHOULD be paying the taxes. If you've worked out some deal to use someone else's bank account, you better have something in writing.

On a related note, is everyone deducting their iPhones and data package expenses?

03-18-2010, 07:33 PM
#3
Joined: Sep 2009
Posts: 330
So, it doesn't matter who is responsible for the apps, only who receives the revenue as their income? Makes sense!

Also, thanks for the tip on the deductions -- while on the subject, how much of the revenue has to be put towards taxes? I've heard 25%

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03-18-2010, 08:31 PM
#4
Joined: Apr 2008
Posts: 2,438
Quote:
Originally Posted by bravetarget View Post
So, it doesn't matter who is responsible for the apps, only who receives the revenue as their income? Makes sense!

Also, thanks for the tip on the deductions -- while on the subject, how much of the revenue has to be put towards taxes? I've heard 25%
Presumably Apple asked for a SSN or TaxID number. I would expect they will tell the IRS they paid $X to that person/entity. If that's you, then then IRS will expect you to pay taxes on that amount.

arn
03-18-2010, 09:07 PM
#5
Joined: Feb 2010
Location: Perv, why do you care?
Posts: 1,807
Quote:
Originally Posted by arn View Post
Presumably Apple asked for a SSN or TaxID number. I would expect they will tell the IRS they paid $X to that person/entity. If that's you, then then IRS will expect you to pay taxes on that amount.

arn
That'd be what I would do. It's the safest way to keep the bases covered.
03-18-2010, 09:29 PM
#6
Joined: Oct 2008
Location: MD, USA
Posts: 1,549
If you're receiving income from Apple, but it's going to someone else's bank account, it may still be taxable to you. Have you received any sort of tax form? They should have been required to send one by now i would think. Just because in the end the funds may end up in a different account, it doesn't necessarily mean you didn't earn them.

When you become a Dev for Apple, didn't you have to set up banking and tax info?

Also, if you didn't fill this out, can you tell if they've been withholding the mandatory 30% for taxes? To get out of that if you're in the US you'd have to send them a W8-BEN..

I do not know anything about taxes for iPhone developers, and have only applied the logic the IRS uses with other situations. Also I have to say that no matter what anyone says on here, you really should speak with a competent tax advisor.

Plus+ ID: Wegmans
03-18-2010, 09:39 PM
#7
Joined: Sep 2009
Posts: 330
Quote:
Originally Posted by Wegmans View Post
If you're receiving income from Apple, but it's going to someone else's bank account, it may still be taxable to you. Have you received any sort of tax form? They should have been required to send one by now i would think. Just because in the end the funds may end up in a different account, it doesn't necessarily mean you didn't earn them.

When you become a Dev for Apple, didn't you have to set up banking and tax info?

Also, if you didn't fill this out, can you tell if they've been withholding the mandatory 30% for taxes? To get out of that if you're in the US you'd have to send them a W8-BEN..

I do not know anything about taxes for iPhone developers, and have only applied the logic the IRS uses with other situations. Also I have to say that no matter what anyone says on here, you really should speak with a competent tax advisor.
Well, thats the thing. Apparently Apple doesn't give out 1099's or report to the IRS on these amounts. Once I heard this, I started to research.

edit: and yes, I gave banking info -- the one they transfer the amounts to -- and they don't take out 30% from our proceeds.

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Last edited by bravetarget; 03-18-2010 at 09:41 PM.
03-18-2010, 09:57 PM
#8
Joined: Oct 2008
Location: MD, USA
Posts: 1,549
In that case, without knowing more about your specific situation, you'd just report it in Schedule C... I would think that perhaps in years to come they will have to start issuing a 1099-MISC.

Since they derive 30% of their income in the form of commission or what have you from your proceeds, there is a limited paper trail that could come back to you in the rare event you are audited.

Unfortunately, like so many things, it falls on our shoulders to report it correctly.. Good luck to you!

Edit: Please don't listen to me, I don't know enough about your situation or these specific earnings to feel confident about this. It may be really simple and you just report it on your 1040 on line 21, "Other Income." Check out pub 525 for that...

I'm pretty interested in solving this question, so if i have time tomorrow at work, i'll keep reading up on it!

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Last edited by Wegmans; 03-18-2010 at 10:11 PM.
03-18-2010, 10:30 PM
#9
Joined: Jul 2009
Posts: 317
I would probably talk to an accountant to be sure, because as you said apple does not report to the IRS. The bank account is in another person's name and has their ssn attached to the account. In the event of an audit by the IRS that bank account will have lots of unreported incoming deposits if you report it on your tax return. I suppose then the owner of that account would have to prove that the tax on that income was reported on your return or something.