I'm running a U.S. registered business, selling intangible services online.
Part of my business is offering an affiliate account registration to individuals and companies who wish to earn money through referral sales.
I have a couple of questions regarding taxes handling for affiliates. I've done my search on the Internet but I'm still confused so I hope someone can clarify the following points to me:
- Is it right that I request form W-9 or form W-8BEN (for non U.S. citizens) from the affiliate users before sending them payments?
- I know that I have to send form 1099, but I don't know where does this form should go to. Should I send it to the IRS or the affiliate user or both?
- Should I send form 1099 once a year or each time I make a payment to the affiliate?
- Do I have to send form 1099 when the money earned by the affiliate hit a certain threshold or I have to send it anyway?
- Is there any other forms or documents to request from or send to the affiliate user or the IRS?