Royalties for 1099 form

[womaninlove1980]

Hello!

Probably silly question. How does Zazzle calculate royalties for a certain calendar year for 1099 form purposes?

just out of curiosity I added all my royalties from 2023 and they don’t match the amount on 1099 that Zazzle sent me in January 1024 for tax filing purposes. Not even off by a few dollars, but off by almost a hundred dollars.

So I wanted to know how do they calculate royalties that are reported on 1099?

Thank you for any information.

[DesertSky]

Though I'm certainly not an authority on this, it's my understanding that the 1099 is based on the payments received in the year, not the money earned during that year. So, when you add up all of the payments you received from January - December 2024 it should be the same amount as the 1099 you receive for 2024.  

[JoansHeart]

What if no payments were received since I have always used earnings for personal purchases?  Any insights on how that would ?  Please advise.  Appreciate any help.  

Joan's Heart Studio

[MOM]

@JoansHeart I'm sure a moderator will eventually chime in here but I believe it doesn't matter on what you spend your earnings, be it now Zazzle or food or rent - income is income in regard of the 1099 form.

[FlyGirl]

The amount I received as a payout in 2024 does not match the total royalties mentioned in the tax form unfortunately.

[Barbara]

Huh? I didn't think to check the amount on my 1099 until just now, and was surprised to find that it's wrong. I carefully added up all the payments I received in 2024, and Zazzle's amount is nearly $100 less than it should be.

Now what? Do I faithfully report my real income or the one stated on the 1099?

Colorwash's Home

[FlyGirl]

I contacted customer support for clarification on the difference. i’ll share what they say as soon as they respond back to my questions. My assumption is that they calculated the total royalties cleared for the year not technically when they executed a payout to your account, which is only done until you reach a certain threshold. i’ll keep everyone on the road posted as soon as I have answers.

[Barbara]

I've checked in former years, and the 1099's have always been correct to the penny. I can't imagine they'd add up anything before it's paid out, given that the payout is the only thing that matters.

I wonder if this is going to be like the year when they had to send out corrected forms.

Colorwash's Home

[MOM]

@womaninlove1980  I'm no authority either but I believe @DesertSky is correct.

[FlyGirl]

Hi, I have the same question. I just received the tax form in the mail and the total amount differs than the total royalty payout made by Zazzle in 2024. Someone please help explain. thank you 

[JoansHeart]

I haven't received anything in the mail 😞

[albamarie]

The amount they showed on my 1099 is off by thousands not hundreds. I am going to contact them by email. I will let you know.

[FlyGirl]

I highly recommend opening a case with the support team. They are still investigating mine. No answer yet. 

[albamarie]

@FlyGirl How did you open a case? Can I write to support@zazzle.com? The discrepancy on my 1099 is a difference of $5610.59. 😲

[FlyGirl]

Oh my gosh! Girl time to contact them. I went to https://www.zazzle.com/about/ask and filled out the contact form on their website with the details.You will get a response from support@zazzle by email, then you can exchange feedback back and forth that way going forward. For them to be taking a while that means there might have been a possible problem. I will post something as soon as I hear anything.

[albamarie]

Thanks for the quick response! I wrote them at the support email, but I will definitely contact them through the website too. Thanks!

[Barbara]

I suspect there are a lot of designers with problematic 1099's who haven't thought to check the accuracy. I believe it's a much larger problem, given that it's being talked about here in this thread. If only we could change the initial title to something like: "Check your 1099. It could be incorrect!"

Colorwash's Home

[albamarie]

@Barbara I think you may be right unfortunately. I wish someone from Zazzle would comment on this thread so we know what is going on.

[Scott]

I would not blindly email our support team. Your email will end up in a very general email inbox that will need to be sorted and sent to the appropriate team. Instead, you should use the ask-a-question (AAQ) page we have here: https://www.zazzle.com/about/ask

Going through this menu system will categorize the email so that the appropriate team can get to work right away. This is the most efficient way to get your email in front of the right person.

And, finally, I must mention that emailing us and using the AAQ page will not magically grant your inquiry any sort of magical powers. Duplicate inquiries actually slow us down. In the future I'd stick with the AAQ page I linked to above.

[albamarie]

@Scott thank you for your response. I still had the email in my drafts, so I did not actually send it but used the ask-a-question form. I wasn't trying to be rude or pushy. Sorry if it seemed that way. I was confused as to the best way to reach out to your team.

[albamarie]

I wanted to give everyone an update on this. The reason that my 1099 seemed so off is that there was a separate 1099 for my royalties, so my situation has been fully resolved. A very big thank you to Padraig who was very swift, kind and professional in responding to my questions.

[Pádraig]

You're very welcome @albamarie, I'm glad we could resolve this for you. All the best!

Pádraig

[FlyGirl]

i’m happy your issue has been addressed. My case is still pending, not sure when it will be resolved. thanks for sharing your update!

[igiftcenter]

If the separate 1099 was for your royalties what was the other 1099 for? May I ask

[Barbara]

Apparently, some people have been receiving the additional 1099-NEC form, their earnings being divided up between that and the MISC form. I don't know what the NEC is for. A few years ago, I received both forms, couldn't find anywhere on my taxes to report them separately, gave up, and reported the total of the two 1099's. Given my 1099 this year is incorrect, I'll be reporting what I know the number should actually be.

Colorwash's Home

[albamarie]

Yes, @igiftcenter @Barbara is right. One form was for my royalties, and the other was for my referrals. I am not sure why they are handled in this way. Maybe the IRS has changed the tax code?

[Barbara]

Given the infernal complexity of the tax code and that only an accountant can understand the instructions for even the simplest of things, many of us are forced to pay to have our taxes done. Ridiculous.

I need to add up my referral total for the year and see if it matches the deficit in my 1099-MISC. (I just did so and it's close but not correct. It's about $8 off.)

Colorwash's Home

[albamarie]

I couldn't agree more @Barbara . I paid more than $500 to get my taxes done, and that was cheap!!

[Barbara]

And here I am, thinking TurboTax is expensive!

Colorwash's Home

[Barbara]

I'm offline friends with another designer, and since she rarely comes to the forum, I alerted her to the possibility that her 1099-MISC is incorrect. She took a look, and sure enough, hers is around $100 too low. Like me, she added in her referrals, and also like me, the number is still wrong.

If the true number of people with faulty 1099s were to write to Zazzle about it, Zazzle would be inundated, and if the true number innocently does their taxes with the wrong amount, how many will end up receiving notifications from the IRS? And if a pattern is detected, will the IRS contact Zazzle?

Colorwash's Home