How do you manage affiliate programs and tax forms?

(Leland Fiegel) #1

If you run an affiliate program in the US, you’re required to submit 1099 forms to the IRS for any affiliates earning over $600 in a calendar year.

I plan on using AffiliateWP to run an affiliate program for my theme business.

I have absolutely zero interest in storing sensitive personal information like social security numbers in my WordPress site’s database, and it seems the AffiliateWP team agrees. Murphy’s law and all that. :slight_smile:

But it’s not really clear how the affiliate program manager using a self-hosted solution can effectively deal with tax forms en masse, besides just hiring an accountant.

That leads me to the question, is there some sort of secure service that you can use to automate it?

I know there are full-blown affiliate program services like ShareASale that handle this stuff, but I find their UI so incredibly clunky that I’m hesitant to deal with them. Their pricing scheme is also not very friendly to fledgling businesses, charging fees if you don’t meet minimum sales thresholds.

I see PayPeopleOnline offers pretty much the exact service I’m looking for, but their site totally skeeves me out and has broken HTTPS implementation on “secure” parts of their site (something that was also pointed out almost a year ago, seemingly still not resolved).

Lackluster security is the last thing I’d expect from a service storing a bunch of people’s SSNs.

If you run an affiliate program, how do you deal with tax forms? Use an all-in-one service like ShareASale? Just-the-tax-forms service like PayPeopleOnline? Employ an accountant?

(Yash Chandra) #2

I run an affiliate program using affiliatewp but my affiliates never hit the threshold that requires issuing 1099. If that happens, I will get my CPA to do it :). Really cannot even imagine storing SSN etc in a wp database.

Similarly, I would say that you may have to manage it manually using an accountant or yourself in the beginning. I think that plugins like AffiliateWP are probably not the best when it comes to heavy affiliate activity and that is why services like shareasale etc exist.

Until it becomes impossible to manage manually, I suggest you setup the affiliates in your payroll system as 1099 at the same time they are vetted enough to be a regular affiliate. May be even look into using an API of your payroll provider to setup a 1099 contractor ? For this, may be, just may be you can create a secure form to collect the SSN and send it over https to the payroll database. Just a quick thought. I could be talking randomly here.

(Leland Fiegel) #3

This makes sense. I get the feeling my getting super intimidated by tax forms is a bit overblown. :slight_smile:

I’m leaning toward the “cross that bridge when I get there” mindset. Start off with AffiliateWP. Getting a CPA if I need to, and if the affiliate program explodes, consider transitioning it to something like ShareASale to properly “outsource” everything.

(Basilis Kanonidis) #4

I pay affiliates through my PERSONAL account, a paypal account, so I just do not do invoice them.
ALthough the amount is not much, so I am covered :slight_smile:
You can - although - invoice your self also the affliated for the money send. That is an option ( yes, to invoice expenses yur self ), you need to ask the CPA although…

(Steven Gliebe) #5

For what it’s worth, I chose ShareASale to avoid having to deal with individual payments, 1099’s, W-9’s, etc. and I haven’t had any regrets. It saves me a lot of time (auto-deposit is nice too), which means it saves me money.

And as an affiliate, I always preferred shops that use a network like ShareASale because it meant I could just go ahead and promote them instead of creating yet another in-house affiliate account and sending my tax ID off to who knows who.

ShareASale reduces the burden for both merchant and affiliate. Yes, it has a clunky interface, but it works. The $25/month minimum threshold is reached with one or two sales. Unless the program is a total failure, it will be covered. ShareASale does a good job as the poor man’s Commission Junction. :slight_smile:

(Leland Fiegel) #6

Haven’t looked too deeply into this yet, but this might be a game-changer for anyone who wants to self-host their affiliate program and not deal with the tax-related stuff:

(Henry Jones) #7

I use AffilateWP. Each year at tax time I total up all the affiliate payments using a spreadsheet and send an email out to those US residents that made more $600. In the email is a link to a secure form where I request that they provide their info (ssn, address, etc.) Then my accountant prepares the 1099’s and I mail them out.

It’s not the most automated process, but it only takes about one hour of work on my part.

(Ronald Salois) #8

Actually, the fact that I should store personal data doesn’t bother me much, but I use this tool especially to work with all records on 1099 form online I heard PayPeopleOnline does a thing yet this service is cheaper a lot, despite the fact is short of features