What did contributorhelp say?

Well, I made the mistake of not redoing the tax interview to make sure they had the taxpayer ID for my LLC, and they took the money out one month. I'm not going to bother worrying about it. I'll just collect it when I do my taxes next year.

If you're overseas, I think the money will probably be gone. You will not be able to get through to the IRS. I would just call it a loss unless it's a lot of money.

Luckily I sell so little with them that I don't know if they are withholding yet.  That would be the final straw for me, I pay tax in the UK and don't want to pay in the US, so my portfolio would go down to 1 image if they screw this up.

Do people pay tax in the US on all their income?  We don't pay income tax in the UK until we earn �10,000.  Why isn't their an earnings threshold for withholding tax?

Do people pay tax in the US on all their income?  We don't pay income tax in the UK until we earn �10,000.  Why isn't their an earnings threshold for withholding tax?

It's kinda complicated. You don't have to file a return unless you earn a certain amount based on your filing status (single, married, head of household), but people who get pay checks pay income tax out of their checks regardless. If they're income is low and they paid some tax out of their checks, they're likely to get all of the income back when they do their return. You can even get back more than what you paid if you qualify for certain credits. And this does not account for Social Security and Medicare tax, which is a separate issue. So even if you make a little, you should file a return anyway.

If you register with some of these stock sites as a sole proprietor and give them your personal social security number, they will withhold tax just like you were getting a standard check. The better option is to do an LLC, get a federal employer tax ID and apply that way. If you do that, you won't pay income taxes up front, and it will help with other taxes as well.

Quote from: ShadySue on May 21, 2015, 04:11

Quote from: sharpshot on May 21, 2015, 04:10

Luckily I sell so little with them that I don't know if they are withholding yet.  That would be the final straw for me, I pay tax in the UK and don't want to pay in the US, so my portfolio would go down to 1 image if they screw this up.

I pay tax in the UK, and 0 on iStock. (At least, so far.)
You can re-do the tax interview if you think you got it wrong first time (OP mentioned a 'mistake')

Correct - I never paid tax until now, didn't read the small print when they changed from Canada to US and altered the payment request method.  Shouldn't have to pay from here but disappointed in the way it was managed (communication far better on every other site).

I'm not sure how much better the communication could have been.
I got at least two emails (I don't get all their emails, so there might have been more), one well in advance, there were a few threads about it on their forum, from weeks before it started until weeks after, and I'm pretty sure there was some sort of diversion on the site 'encouraging' me to do the interview when the time window opened.

It seems though that they deduct 28% from non-US sourced sales which is a new one on me - thought only US sales were subject to US taxes?

People living in non treaty jurisdictions who complete the tax interview properly are not subject to withholding tax on non US sales. People who do not complete the tax interview properly are taxed on both US and non US sales. This was explained at various points ahead of the change.

Remember that part of the purpose of the tax interview (from the US govt perspective) is to identify US citizens living abroad. US citizens are subject to US tax wherever they live. Correctly completing the interview is therefore also about identifying yourself as not being a US citizen.

OK that's as good of an explanation as I'll get, thanks.


It still seems weird that they can't make retrospective adjustments (not as if they send individual payments to revenue for each contributor) but ,given their incompetence with the big stuff, it's no surprising they can't handle anything small that's out of routine.

Of course they could make those adjustments but they won't because it's too much like hard work 

Quote from: Teddy the Cat on June 08, 2015, 04:02

Quote from: heywoody on June 06, 2015, 17:59

OK that's as good of an explanation as I'll get, thanks.


It still seems weird that they can't make retrospective adjustments (not as if they send individual payments to revenue for each contributor) but ,given their incompetence with the big stuff, it's no surprising they can't handle anything small that's out of routine.

Of course they could make those adjustments but they won't because it's too much like hard work 

I think I read that it's an issue the contributor has to take up with the IRS.

Yes, that is indeed their position but only because it is their position and they don't have the imagination or competence to handle the matter like a professional organisation.  No doubt withholding tax is sitting in their account earning interest in the meantime...

AS I understand it, although the interview was / is conducted through the iStock website, the arrangement whereby you are not liable to pay US taxes is actually directly between you as an individual or company, and the American IRS. It's nothing as such to do with iStock itself. The IRS then gives iStock permission to pay you the full amount without the witholding tax being taken.
iStock can't just pay the full amount to you without permission from the IRS or they would become liable for the tax money.

Quote from: Micky_Mango on June 09, 2015, 00:50

Although IS have been woefully ill prepared for changes in the past it is hard to fault how they handled the new payment and tax changes, with months of emails and forum posts explaining the upcoming changes. To call them incompetent on this issue is a bit unfair, and to take no responsibility yourself is a bit rich IMHO. Did you not read any of the information or emails regarding the changes? They were made very clear, and it's hard to see what more they could have done. Sometimes we have to take a bit of responsibility ourselves. On top of this, the amounts you are talking about must be very small, you have 300 sales at IS in 6 years so not a great deal in terms of money. You are also presumably aware that if your income is taxed once ( ie. you are taxed in US on your income from US) you won't be taxed on it again in the UK? This is sounding like a very small storm in a teacup.

I have said earlier that failing to do the tax interview was on me (taking responsibility).  Also true that we are talking about a trivial sum of money.  However, in principle, the mechanics of the situation are that money is moved from the contributor to a pot of money for revenue which is paid out at various points in time but will always have some funds there.  Where a deduction should not have made (for whatever reason) it should be a simple matter to debit one account and credit the other - this is how companies (even American ones as I happen to be employed by one) operate. So, notwithstanding my error, I stand over my statement that there is a lack of competence and imagination involved by IS.  This is the very same IS who feels that its FAQ takes precedence over the contract it enters into with its contributors.

IS have many tens of thousands of contributors, do you really expect them to start making individual adjustments to the many thousands who doubtless failed to take any notice of the many weeks of reminders of forum posts and emails, to pay back tiny amounts of money to people who couldn't be bothered to keep an eye on their own businesses? As I said before, there is a principle in taxation that you are only taxed once on income, so any tax IS have deducted won't be a million miles from what you would have paid in your own country, where you won't have to pay tax a second time on the already taxed income, so really, you are using a tiny tiny stick to beat IS when the fault lies with you anyway. How much are we talking about? A few dollars? I'm the first in line to criticise IS when the deserve it, but in this case the lack of competence and imagination is down to you buddy. Perhaps you should also read Difydave's post too, where he states "The IRS then gives iStock permission to pay you the full amount without the witholding tax being taken.
iStock can't just pay the full amount to you without permission from the IRS or they would become liable for the tax money. "

Quote from: heywoody on June 09, 2015, 17:16

Quote from: Micky_Mango on June 09, 2015, 00:50

Although IS have been woefully ill prepared for changes in the past it is hard to fault how they handled the new payment and tax changes, with months of emails and forum posts explaining the upcoming changes. To call them incompetent on this issue is a bit unfair, and to take no responsibility yourself is a bit rich IMHO. Did you not read any of the information or emails regarding the changes? They were made very clear, and it's hard to see what more they could have done. Sometimes we have to take a bit of responsibility ourselves. On top of this, the amounts you are talking about must be very small, you have 300 sales at IS in 6 years so not a great deal in terms of money. You are also presumably aware that if your income is taxed once ( ie. you are taxed in US on your income from US) you won't be taxed on it again in the UK? This is sounding like a very small storm in a teacup.

I have said earlier that failing to do the tax interview was on me (taking responsibility).  Also true that we are talking about a trivial sum of money.  However, in principle, the mechanics of the situation are that money is moved from the contributor to a pot of money for revenue which is paid out at various points in time but will always have some funds there.  Where a deduction should not have made (for whatever reason) it should be a simple matter to debit one account and credit the other - this is how companies (even American ones as I happen to be employed by one) operate. So, notwithstanding my error, I stand over my statement that there is a lack of competence and imagination involved by IS.  This is the very same IS who feels that its FAQ takes precedence over the contract it enters into with its contributors.

IS have many tens of thousands of contributors, do you really expect them to start making individual adjustments to the many thousands who doubtless failed to take any notice of the many weeks of reminders of forum posts and emails, to pay back tiny amounts of money to people who couldn't be bothered to keep an eye on their own businesses? As I said before, there is a principle in taxation that you are only taxed once on income, so any tax IS have deducted won't be a million miles from what you would have paid in your own country, where you won't have to pay tax a second time on the already taxed income, so really, you are using a tiny tiny stick to beat IS when the fault lies with you anyway. How much are we talking about? A few dollars? I'm the first in line to criticise IS when the deserve it, but in this case the lack of competence and imagination is down to you buddy. Perhaps you should also read Difydave's post too, where he states "The IRS then gives iStock permission to pay you the full amount without the witholding tax being taken.
iStock can't just pay the full amount to you without permission from the IRS or they would become liable for the tax money. "

Here's the thing, "buddy".  A well designed IT system would accommodate this situation automatically either by holding payments pending completion of the tax form or by auto adjusting balances.  Not everyone lives on their forum or waits with bated breath to read the next bit of spam they issue in case it has something significant to say.