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TF2 Contributor Payday

Valve announces their Team Fortress 2 Contribute program has ended up contributing quite a bit to the bank accounts of the first five participants in this community marketplace in the teamplay shooter, saying the five have received royalty payments ranging from $39,000 to $47,000 each. Word is: "Funds from sales of community members' items were to be deposited directly into their PayPal accounts. However, within days, the revenue that their items generated exceeded PayPal's cap on the maximum deposit size. While Valve made alternate payment arrangements for the others, two of the community members flew to Seattle to receive their first checks directly."

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12. Re: TF2 Contributor Payday Oct 22, 2010, 10:44 Tom
 
Not sure how you figure..? Self-employment tax is 15.3%. As an employee you'd be paying half of that, or 7.65%. So your effective tax rate is increased by 7.65% being self-employed. That's a bit different from a 25% increase.  
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11. Re: TF2 Contributor Payday Oct 22, 2010, 09:46 xXBatmanXx
 
Exactly Tom - and what you end up with is probably close to 50%.

At that point, I would rather be on their payroll and get 75% of my money. Or more depending on family, etc.

We do OT work for cash and get 1099'd.
It isn't even worth our time even at double pay.
 
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Buy from GreenManGaming? Use this, we both get $2.00 - http://www.greenmangaming.com/?gmgr=purutuwi
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10. Re: TF2 Contributor Payday Oct 22, 2010, 09:13 Tom
 
I don't think it would be such a big deal in the US. All you have to do is report it as self-employment income as a sole proprietor. You are running a small business on the side. You can give it a name or just use your legal name to keep things simple. No need to incorporate, do payroll, or any of that crap. Just get a 1099 form from Valve (they are legally obligated to provide one) and report it as income on a schedule C at next tax time. Until then, you might want to start making quarterly estimated tax payments, easily done online through EFTPS for federal and your state's web site for state, based on your previous year's (lower) income so that the timing of your income is not an issue. It's known as the safe-harbor method, look it up.

Tax rate is typically the same as if you'd earned it at a regular job working for someone else, except you have to pay 100% of medicare and social security. Normally your employer pays half of that. This is captured by the payment of federal self-employment (SE) tax in addition to the usual income taxes. TurboTax or whatever program you like can help you with this and tell you how much to pay for estimated taxes.

Of course, I'm not an accountant or tax consultant, but I can say that after much research, doing this stuff in reality ended up being a lot simpler than I expected. No trouble with the tax man yet.

(Note - this all assumes that this royalty income can be treated like income received in exchange for work performed / services rendered. If that's not true and it's taxed differently, then maybe things aren't so simple!)
 
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9. Re: TF2 Contributor Payday Oct 22, 2010, 04:31 xXBatmanXx
 
I actually agree with the "not a good idea to take that much income in at once".

Here in the US you can probably assume an audit will come along with that!

I would rather have them set me up as an employee if I was going to continue my business with them, or have them keep an account and just give me all of their games in their library continuously until money is depleted.

Here in MN, after taxes, fed taxes, and the "windfall" tax of that sum of money....you would end up with about half of it. Which would suck, as they aren't going to withhold any at Valve, so you will have to actually send it directly in before tax season gets here.....to me - just to many questions for the tax man....
 
Avatar 10714
 
Buy from GreenManGaming? Use this, we both get $2.00 - http://www.greenmangaming.com/?gmgr=purutuwi
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8. Re: TF2 Contributor Payday Oct 21, 2010, 19:48 CommunistHamster
 
Yeah, that's essentially unlimited games for as long as Steam exists.  
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7. Re: TF2 Contributor Payday Oct 21, 2010, 19:28 Paketep
 
rist3903 wrote on Oct 21, 2010, 17:09:
Alternatively, they could add funds to their steam wallet.
Hah.

That wallet is going to be full for decades!.

40K to spend in games?. Picture me salivating
 
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6. Re: TF2 Contributor Payday Oct 21, 2010, 17:57 Cutter
 
Well of course you're going to get taxed on it, it's income. Still for the few hours work it took them to create their stuff that's a nice piece of cheddar.
 
Avatar 25394
 
"Bye weeks? Bronko Nagurski didn't get no bye weeks, and now he's deadů Well, maybe they're a good thing." - Moe
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5. Re: TF2 Contributor Payday Oct 21, 2010, 17:09 rist3903
 

Alternatively, they could add funds to their steam wallet.
Hah.
 
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4. Re: TF2 Contributor Payday Oct 21, 2010, 16:23 frag.machine
 
I agree with eRe4s3r's; while it's nice to get such reward for their work, off-shore artists may find out to be a headache to actually put the hands on the money. Not their fault or Valve's.  
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3. Re: TF2 Contributor Payday Oct 21, 2010, 14:19 eRe4s3r
 
Nope, for a freelancer such high (unplanned extra) income is more trouble than you think ;p In Germany anyway.

This comment was edited on Oct 21, 2010, 14:28.
 
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2. Re: TF2 Contributor Payday Oct 21, 2010, 14:05 Rattlehead
 
Yes you do
 
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1. Re: TF2 Contributor Payday Oct 21, 2010, 13:48 eRe4s3r
 
Receiving such high foreign currency payments also flags you red with the tax.

I don't envy them
 
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