I'm building a start-up pay per download site. It will utilize surveys to make money, but will be paying the uploaders to advertise and upload files. I live in ohio, usa. If we start doing well, I'd like to get us setup with someone like Payoneer vs just buying customized pre-paid gift cards. However to work with payoneer you must be a registered business, so my concern is... If I end up making say $1k/mo (just an example) how the hell do I handle taxes for that? Do I tax my uploaders, do I just file a 1099 and report my overall earnings? idk.. I want to do this right, if the site does take off I don't want shutdown over something stupid.
You cannot file a 1099 on your earnings. 1099s are to report PAYMENTS from you to someone else. And you MAY need to file 1099s for some of the uploaders. A business must file its own return based on its earnings. And you must file a 1040 based on your earnings. Basically, you NEED to hire a CPA to get it right and avoid tax problems. Don't try to do it yourself. You cannot charge your customers for those taxes either. The ONLY taxes you can collect from your customers are OHIO sales tax to customers living in OHIO. If you have a physical presence in any other sales tax state, you must also collect those sales taxes from the appropriate customers.