1099 Reporting and Tax Policy for Creators

1099 Reporting and Tax Policy for Creators
MyFavoriteThings, Inc. dba Mavely

This 1099 Reporting and Tax Policy ("Policy") outlines the procedures and requirements for issuing Form 1099-NEC (Nonemployee Compensation) for independent contractors ("Contractor") who have provided services to MyFavoriteThings, Inc. dba Mavely ("Company"). The policy applies to Contractors who are U.S.-based and have been paid $600 or more by the Company for services rendered in a given calendar year.

1. 1099 Reporting Requirement

• In compliance with IRS regulations, if a Contractor earns $600 or more from the Company within a calendar year, the Company is required to issue a Form 1099-NEC.
• This form reports nonemployee compensation paid to Contractors for services rendered during the tax year.

2. Payment Methods and Exclusions

• This Policy applies to all payments made to Contractors by methods other than PayPal. Payments made via ACH, direct deposit, wire transfer, or any other payment method except PayPal will be included in the 1099-NEC reporting threshold.
• Note: Payments made through PayPal are excluded from this Policy for reporting purposes. The Company does not issue a 1099 for payments processed via PayPal. However, the Contractor is responsible for reporting income earned through PayPal as required by the IRS. Partners paid via PayPal will receive any applicable tax documentation via PayPal directly. Any and all questions in regards to such documentation should be directed to PayPal.

3. Contractor’s Responsibility to Provide Accurate Information

• To ensure accurate 1099 reporting, the Contractor must provide the Company with complete and correct information, including:
  • Legal name and business name (if applicable)
  • Social Security Number (SSN) or Employer Identification Number (EIN)
  • Current address
• Contractors must notify the Company promptly if any of this information changes during the calendar year.

4. Tax Liability and Reporting

• The Contractor is responsible for the payment of all federal, state, and local taxes related to the income earned through services provided to the Company. As an independent contractor, the Contractor is not an employee of the Company, and the Company does not withhold any taxes on their behalf.
• The Company makes no representations regarding the tax consequences of receiving payments or the issuance of the 1099 form. Contractors should consult a tax professional for assistance with their tax obligations.

5. Issuance of 1099 Form

• The Company will issue a Form 1099-NEC to the Contractor no later than January 31st of the year following the tax year in which the Contractor earned the payment(s).
• The 1099-NEC form will report the total nonemployee compensation paid to the Contractor for services rendered in the previous calendar year. It will be sent to the address provided by the Contractor or made available electronically if agreed upon.

6. Audit and Recordkeeping

• The Company reserves the right to request additional documentation or clarification from the Contractor, if necessary, to verify payment amounts and methods for the purposes of 1099 reporting.
• It is the Contractor’s responsibility to maintain accurate records of all payments received from the Company and any relevant tax documents. The Company is not responsible for tracking or maintaining tax records for Contractors.

7. Amendments to this Policy

• The Company reserves the right to amend or update this Policy as needed, especially in response to changes in federal or state tax laws. Any amendments will be communicated to the Contractors and will apply to payments made after the effective date of the update.

8. Disclaimer - No Tax Advice

• MyFavoriteThings, Inc. dba Mavely is not a tax advisor and does not provide tax advice. The purpose of this Policy is to inform Contractors of the 1099 reporting requirements and to clarify what forms Contractors may or may not receive at the end of the tax year. Contractors are encouraged to consult with a qualified tax professional for any questions regarding their tax obligations or the tax implications of receiving a 1099 form.

9. Agreement to Policy

By continuing to provide services and accept payments from MyFavoriteThings, Inc. dba Mavely, the Contractor acknowledges and agrees to this 1099 Reporting and Tax Policy.