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1099-MISC? Hmmm...

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Junior Member
What is the name of your state? WA

Here's an odd one. I am a content producer. I own this content 100%. I create this content in my free time. I am otherwise employed full-time in a field unrelated to content creation.

I recently started offering my content for sale through a website that hosts similar types of content, and processes payments from web surfers who want to buy that content.

Every month, I get a check for about 70% of total sales of my content. The owner of the website keeps about 30% of the total sales to offset hosting, bandwidth, and billing costs. We have no agreement, document, or any other instrument of any kind that indicates that I provide any 'services' of any kind to this business.

In essence, I filled out a web form with my name, address, and e-mail. I received login credentials via e-mail. I uploaded my content. My content was displayed on the website. Web surfers purchased. I got a check every month.

Nowhere on this website or the web form that I completed does it say anything about the legal or tax-related relationship between myself and the business running the website.

Anyway, this business sent me a 1099-MISC, with the total amount of the distribution I received in 2004 under box 7 (nonemployee compensation). Seems to me that, for whatever reason, this business has just tagged me as an 'independent contractor' (at least in the eyes of the IRS, that is...)

But I feel that the checks I received are actually royalties, and should be identified as such, because this relationship is closer to an author-publisher or author-literary agent relationship. I can only imagine that this business has been advised to identify these distributions as 'nonemployee compensation', but the tax ramifications on my end are definitely not working for me. AT ALL. :mad:

Is there any way of determining whether this business can just arbitrarily 'tag' me as an 'independent contractor', even though we have no formal agreement of any kind regarding our relationship? I never signed anything, I never even entered my SS# on the form that I used to obtain an upload account to this business' web server. The only reason he was able to send me a 1099-MISC was because I gave him my SS# over the phone when he called me up last week asking for it so he could file his taxes.

I'm NOT looking for a way to avoid paying taxes on this money; that's NOT my intent. It's important to reiterate that I was employed on a full-time, W-2 basis throughout most of 2004 for a separate and unrelated company. This means I have a W-2 to file as well. I'm gonna be filing anyway.

My beef is that this 1099-MISC singlehandedly takes me from the land of 1040EZ to the land of 1040, and I just don't think I should be forced into being considered an independent contractor, and thus be forced to file the self-employment forms and all that. I am NOT an independent contractor, and I am NOT self-employed. Any thoughts?


Senior Member
If you were a client of mine, I would consider you an independent contractor, based on your explanation of what you do.

You are definitely not an employee.

While it would be nice for you if your income were considered royalties, that doesn't appear to be the case.

You may want to peruse the IRS website. They frequently do "Market Segment" studies. You may be able to find one on your line of work.

Those studies are used by IRS field agents to conduct audits, and should give you an excellent idea of exactly how the IRS would classify this activity.



Junior Member
Appreciate the feedback, but do not see any substantiating reason to classify this as an 'independent contractor' relationship, especially considering the total lack of a contract between myself and the other entity. I'm starting to understand that a 1099-MISC seems to be a 'catch-all' reporting document for anything that cannot be otherwise clearly classified, and as such leaves a lot of room for uncertainty.

Based on this feedback, there's no question in my mind that I need to keep looking.

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