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Discussion Starter · #1 ·
Ok, let me make one thing clear...I'm not trying to be a threadless clone lol.

That being said, I do want to implement some sort of crowdsourcing and voting into my site. Web 2.0 if you will. Now my question is, if I make a $9 profit on a shirt @ $20, and I give the designer $4 of that profit until they reach an amount of say $10,000; will I have to pay social security, get tax info from them, etc.,? Will that basically be chalked up as a contracted expense from my business meaning, I pay them their cash and it's done?

I know this is kind of a confusing question that probably very few can answer if any, but it seems like a great way to generate traffic without advertising much. People will want that money, and will link in their shirts as much as possible, thus increasing my page rank, traffic, SE rankings...etc. The list goes on.

Those are huge advantages. The reason I'm splitting profits like this is simply I don't have the means to reimburse someone $2,500 starting out for a design. That's why my cap is so high as well to remain competitive since it's not a one time check, and hey..I'd rather split a $9 profit than not have it at all. :) lol

I love the idea of it, but if I'm going to have to contact every individual from that year around tax time, report what they were paid, pay social security on them, etc., I'm not sure it will be worth it.

Something else though, is the reason most sites pay $2500 per design because any income under $3k doesn't have to be reported to the IRS? Sorry for the long post, I hope someone has some answers. Google was no help. lol :confused:
 

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Re: Crowdsourcing questions...

Google is a poor replacement for a true accountant or CPA. That said, I'm pretty sure that you have to report via 1099 any amount paid to a "contractor" that is over $600. As long as the designer is not a "captured employee" of your company you should be able to claim them as a "contractor" responsible for their own taxes.
 
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