Linden Lab Official:Required Tax Documentation FAQ - Revision history

Maggie Linden: Tax law wording update because the IRS eschews brevity

2024-03-26T18:41:34Z

Tax law wording update because the IRS eschews brevity

← Older revision		Revision as of 11:41, 26 March 2024
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	===What is IRC Section 6050W, and how do I know if it affects me?===		===What is IRC Section 6050W, and how do I know if it affects me?===
	This US tax law requires Linden Lab to ~~report USD (US Dollar) credit transactions which~~ reach certain thresholds in a calendar year.		This US tax law requires Linden Lab to file with the IRS and provide taxpayers a Form 1099-K that reports payments for goods or services where gross payments reach certain thresholds in a calendar year.

	For the 2023 reporting year, U.S. residents with 200 or more processed credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year. We will send you a copy of this form.		For the 2023 reporting year, U.S. residents with 200 or more processed credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year. We will send you a copy of this form.

Maggie Linden: /* If I have additional questions about the necessary forms, how can I ask them? */

2024-03-26T18:24:35Z

If I have additional questions about the necessary forms, how can I ask them?

← Older revision		Revision as of 11:24, 26 March 2024
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	===If I have additional questions about the necessary forms, how can I ask them?===		===If I have additional questions about the necessary forms, how can I ask them?===
	Please create a Support ticket to [https://support.secondlife.com/create-case/ contact our Support team] for assistance, and we'll do our best to help. As stated above, Linden Lab, Second Life ~~and Tilia~~ cannot provide tax advice that's specific for your needs, but we'll do our best to answer general questions or help with your concerns if we can.		Please create a Support ticket to [https://support.secondlife.com/create-case/ contact our Support team] for assistance, and we'll do our best to help. As stated above, Linden Lab, Tilia, and Second Life Customer Support cannot provide tax advice that's specific for your needs, but we'll do our best to answer general questions or help with your concerns if we can.

Maggie Linden at 18:23, 26 March 2024

2024-03-26T18:23:16Z

Maggie Linden: Updates for 2024

2024-03-22T18:37:48Z

Updates for 2024

Jeremy Linden: Created page with "{{KBnote|For more information, see the following post on the official Second Life blog: [http://community.secondlife.com/t5/Commerce/Required-Tax-Documentation/ba-p/2336109 Requi…"

2014-02-10T22:35:12Z

Created page with "{{KBnote|For more information, see the following post on the official Second Life blog: [http://community.secondlife.com/t5/Commerce/Required-Tax-Documentation/ba-p/2336109 Requi…"

New page

{{KBnote|For more information, see the following post on the official Second Life blog: [http://community.secondlife.com/t5/Commerce/Required-Tax-Documentation/ba-p/2336109 Required Tax Documentation].}}

=== Why do I need to submit tax-related documentation to Linden Lab? ===
The Internal Revenue Service (IRS) requires Linden Lab to collect and retain tax forms from users who reach certain L$ sale transaction volumes and/or amounts.

=== How do I know if I need to submit documentation? ===
If you are required to submit documentation to Linden Lab, we will email you with links to the appropriate forms and instructions on how to submit them. If you do not receive an email from Linden Lab, we do not need you to complete these forms.

=== What tax-related documentation do I need to submit to Linden Lab? ===
If you reach certain L$ sale transaction volumes, the forms you’ll need to submit depend on where you live:
* U.S. residents will need to complete Form W-9
* Non-U.S. residents will need to complete boxes 1-5 of part 1 of Form W-8BEN

===What is a Form W-9? What information will I need to provide?===
This form collects the information the IRS requires from US taxpayers.
To complete this form, you will need to provide a TIN; in most cases, this is either a Social Security Number (SSN) or an Employer Identification Number (EIN). The IRS website contains more information about how to obtain an EIN [http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-%28EIN%29-Online here].

===What is a Form W-8BEN? What information will I need to provide?===
This form collects the information that the IRS needs from non-US residents in order to exempt them from US tax reporting requirements.
You only need to complete Part I, #1-5 (which does not require an EIN nor an ITIN).

===If I receive a request for this documentation, how long do I have to complete it? What happens if I don’t provide these forms to Linden Lab?===
Please follow the instructions to complete and submit the required Form W-9 or W-8BEN within thirty (30) days of receipt.
If Linden Lab does not receive your completed form within thirty (30) days, your account will be put on hold until the requested forms are received.

===What is IRC Section 6050W, and how do I know if it affects me?===
This US tax law requires Linden Lab to report to the IRS the total amount of money paid to any US resident whose L$ sales transactions reach certain thresholds in a calendar year.
For U.S. residents with 200 or more L$ sale transactions with a total amount of gross proceeds in excess of $20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year. We will send you a copy of this form.

===What is a Form 1099-K? Why would I receive one from Linden Lab, and when?===
This form is used to report to the IRS the gross proceeds earned from L$ sales transactions in a calendar year. Linden Lab is required to file this form for US residents who reach certain transaction thresholds.
For U.S. residents with 200 or more L$ sale transactions with a total amount of gross proceeds in excess of $20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year.

===If I have several Second Life accounts that do not meet the thresholds individually, but do so when combined, will my accounts be affected?===
Yes

===I use PayPal with my Second Life account; why is the information on my Form 1099-K from Linden Lab different from the information on the form I receive from PayPal?===
The information on a Form 1099-K you receive from Linden Lab will be based only on the gross proceeds from the sale of L$. This is the information we are required to include on the form.
If you use PayPal with your Second Life account and also receive a 1099-K from PayPal, it would include payouts to your account as well as other activity you may have with PayPal.
It is your responsibility to inform the IRS of the profits or losses of your in-world business on IRS Schedule C.

===What do if I believe there’s a mistake on the 1099-K that Linden Lab sent me?===
Create a Case in the [https://support.secondlife.com/ Support Portal].

===How do I use the 1099-K for my tax return?===
Contact your tax, legal, or professional advisor for guidance.

===If I have additional questions about the necessary forms, how can I ask them?===
Open the request in your [https://support.secondlife.com/history/ Case History] in the Support Portal and reply to the Case if you have any related questions.

← Older revision		Revision as of 11:23, 26 March 2024
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	=== Why do I need to submit tax-related documentation to Linden Lab? ===		=== Why do I need to submit tax-related documentation to Linden Lab? ===
	The Internal Revenue Service (IRS) requires Linden Lab to collect and retain tax forms from users who reach certain ~~L$ sale~~ transaction volumes and/or amounts. Certain other tax jurisdictions, like US states with income tax, may also require Linden Lab to collect tax information according to their local tax laws. If you're unsure whether or not your location has tax requirements that may apply to you, please contact your tax professional or local tax authority for further information.		The Internal Revenue Service (IRS) requires Linden Lab to collect and retain tax forms from users who reach certain USD process credit transaction volumes and/or amounts. Certain other tax jurisdictions, like US states with income tax, may also require Linden Lab to collect tax information according to their local tax laws. If you're unsure whether or not your location has tax requirements that may apply to you, please contact your tax professional or local tax authority for further information.

	=== How do I know if I need to submit documentation? ===		=== How do I know if I need to submit documentation? ===
	If you are required to submit documentation to Linden Lab, we will email you with links to the appropriate forms and instructions on how to submit them. If you do not receive an email from Linden Lab, we do not need you to complete these forms. Tax documentation requests from Linden Lab may also show as originating with Tilia LLC, ~~a subsidary of Linden Lab~~ which manages financial services for Second Life and helps Second Life comply with U.S. laws and regulations.		If you are required to submit documentation to Linden Lab, we will email you with links to the appropriate forms and instructions on how to submit them. If you do not receive an email from Linden Lab, we do not need you to complete these forms. Tax documentation requests from Linden Lab may also show as originating with Tilia LLC, which manages financial services for Second Life and helps Second Life comply with U.S. laws and regulations. Linden Research, Inc. is a majority owner of Tilia LLC.

	If you are concerned that you've received an email requesting tax documentation, and want to confirm that it is in fact a valid request for information from Linden Lab or Tilia related to your Second Life business activity, please [https://support.secondlife.com/create-case/ contact our Support team] for assistance.		If you are concerned that you've received an email requesting tax documentation, and want to confirm that it is in fact a valid request for information from Linden Lab or Tilia related to your Second Life business activity, please [https://support.secondlife.com/create-case/ contact our Support team] for assistance.
Line 12:		Line 12:
	If you reach certain USD (US Dollar) credit transaction volumes, the forms you’ll need to submit depend on where you live:		If you reach certain USD (US Dollar) credit transaction volumes, the forms you’ll need to submit depend on where you live:
	* U.S. residents will need to complete Form W-9		* U.S. residents will need to complete Form W-9
	* Non-U.S. residents will need to complete ~~boxes 1~~-~~5 of part 1 of~~ Form W-8BEN		* Non-U.S. residents will need to complete Form W-8BEN (for individuals) and Form W-8BEN-E (for entities, like businesses).

	===What is a Form W-9? What information will I need to provide?===		===What is a Form W-9? What information will I need to provide?===
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	===What is a Form W-8BEN? What information will I need to provide?===		===What is a Form W-8BEN? What information will I need to provide?===
	This form collects the information that the IRS needs from non-US residents in order to exempt them from US tax reporting requirements.		This form collects the information that the IRS needs from non-US residents in order to exempt them from US tax reporting requirements.
	~~You only need to complete Part I, #1-5 (which does not require an EIN nor an ITIN).~~

	===If I receive a request for this documentation, how long do I have to complete it? What happens if I don’t provide these forms to Linden Lab?===		===If I receive a request for this documentation, how long do I have to complete it? What happens if I don’t provide these forms to Linden Lab?===
Line 29:		Line 28:

	===What is IRC Section 6050W, and how do I know if it affects me?===		===What is IRC Section 6050W, and how do I know if it affects me?===
	This US tax law requires Linden Lab to report ~~to the IRS the total amount of money paid to any US resident whose~~ USD (US Dollar) credit transactions reach certain thresholds in a calendar year.		This US tax law requires Linden Lab to report USD (US Dollar) credit transactions which reach certain thresholds in a calendar year.

	For the 2023 reporting year, U.S. residents with 200 or more processed credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year. We will send you a copy of this form.		For the 2023 reporting year, U.S. residents with 200 or more processed credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year. We will send you a copy of this form.
Line 40:		Line 39:
	For U.S. residents with 200 or more process credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year.		For U.S. residents with 200 or more process credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year.

	Please note, certain US states may have state income tax thresholds that may apply as well. For more information about state income tax that may apply to you, please ~~contaxt~~ a tax professional or tax advisor or your state's income tax authorities.		Please note, certain US states may have state income tax thresholds that may apply as well. For more information about state income tax that may apply to you, please contact a tax professional or tax advisor or your state's income tax authorities.

	===If I have several Second Life accounts that do not meet the thresholds individually, but do so when combined, will my accounts be affected?===		===If I have several Second Life accounts that do not meet the thresholds individually, but do so when combined, will my accounts be affected?===
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	===How do I use the 1099-K for my tax return?===		===How do I use the 1099-K for my tax return?===
	Please contact your tax, legal, or professional advisor for guidance. Tax law and taxes in general are complex and different for every jurisdiction. Linden Lab, Second Life ~~and Tilia~~ cannot provide tax advice that's specific for your needs, and we'd hate to give information that isn't helpful or correct in your individual tax situation.		Please contact your tax, legal, or professional advisor for guidance. Tax law and taxes in general are complex and different for every jurisdiction. Linden Lab, Tilia, and Second Life Customer Support cannot provide tax advice that's specific for your needs, and we'd hate to give information that isn't helpful or correct in your individual tax situation.

	In the United States, the IRS has a page with resources for tax assistance and finding local tax help that may be useful for you: [https://www.irs.gov/help/let-us-help-you https://www.irs.gov/help/let-us-help-you]		In the United States, the IRS has a page with resources for tax assistance and finding local tax help that may be useful for you: [https://www.irs.gov/help/let-us-help-you https://www.irs.gov/help/let-us-help-you]

← Older revision		Revision as of 11:37, 22 March 2024
Line 2:		Line 2:

	=== Why do I need to submit tax-related documentation to Linden Lab? ===		=== Why do I need to submit tax-related documentation to Linden Lab? ===
	The Internal Revenue Service (IRS) requires Linden Lab to collect and retain tax forms from users who reach certain L$ sale transaction volumes and/or amounts.		The Internal Revenue Service (IRS) requires Linden Lab to collect and retain tax forms from users who reach certain L$ sale transaction volumes and/or amounts. Certain other tax jurisdictions, like US states with income tax, may also require Linden Lab to collect tax information according to their local tax laws. If you're unsure whether or not your location has tax requirements that may apply to you, please contact your tax professional or local tax authority for further information.

	=== How do I know if I need to submit documentation? ===		=== How do I know if I need to submit documentation? ===
	If you are required to submit documentation to Linden Lab, we will email you with links to the appropriate forms and instructions on how to submit them. If you do not receive an email from Linden Lab, we do not need you to complete these forms.		If you are required to submit documentation to Linden Lab, we will email you with links to the appropriate forms and instructions on how to submit them. If you do not receive an email from Linden Lab, we do not need you to complete these forms. Tax documentation requests from Linden Lab may also show as originating with Tilia LLC, a subsidary of Linden Lab which manages financial services for Second Life and helps Second Life comply with U.S. laws and regulations.

			If you are concerned that you've received an email requesting tax documentation, and want to confirm that it is in fact a valid request for information from Linden Lab or Tilia related to your Second Life business activity, please [https://support.secondlife.com/create-case/ contact our Support team] for assistance.

	=== What tax-related documentation do I need to submit to Linden Lab? ===		=== What tax-related documentation do I need to submit to Linden Lab? ===
	If you reach certain ~~L$ sale~~ transaction volumes, the forms you’ll need to submit depend on where you live:		If you reach certain USD (US Dollar) credit transaction volumes, the forms you’ll need to submit depend on where you live:
	* U.S. residents will need to complete Form W-9		* U.S. residents will need to complete Form W-9
	* Non-U.S. residents will need to complete boxes 1-5 of part 1 of Form W-8BEN		* Non-U.S. residents will need to complete boxes 1-5 of part 1 of Form W-8BEN
Line 14:		Line 16:
	===What is a Form W-9? What information will I need to provide?===		===What is a Form W-9? What information will I need to provide?===
	This form collects the information the IRS requires from US taxpayers.		This form collects the information the IRS requires from US taxpayers.
	To complete this form, you will need to provide a TIN; in most cases, this is either a Social Security Number (SSN) or an Employer Identification Number (EIN). The IRS website contains more information about how to obtain an EIN [~~http~~://www.irs.gov/~~Businesses~~/~~Small~~-~~Businesses~~-&-~~Self-Employed~~/~~Apply~~-for-an-~~Employer~~-~~Identification~~-~~Number~~-~~%28EIN%29~~-~~Online~~ here].
			To complete this form, you will need to provide a TIN (Tax Information Number); in most cases, this is either a Social Security Number (SSN) or an Employer Identification Number (EIN). The IRS website contains more information about how to obtain an EIN [https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online here].

	===What is a Form W-8BEN? What information will I need to provide?===		===What is a Form W-8BEN? What information will I need to provide?===
Line 22:		Line 25:
	===If I receive a request for this documentation, how long do I have to complete it? What happens if I don’t provide these forms to Linden Lab?===		===If I receive a request for this documentation, how long do I have to complete it? What happens if I don’t provide these forms to Linden Lab?===
	Please follow the instructions to complete and submit the required Form W-9 or W-8BEN within thirty (30) days of receipt.		Please follow the instructions to complete and submit the required Form W-9 or W-8BEN within thirty (30) days of receipt.
	If Linden Lab does not receive your completed form within thirty (30) days, your account will be put on hold until the requested forms are received.
			If Linden Lab does not receive your completed form within thirty (30) days, your account will temporarily be put on hold until the requested forms are received.

	===What is IRC Section 6050W, and how do I know if it affects me?===		===What is IRC Section 6050W, and how do I know if it affects me?===
	This US tax law requires Linden Lab to report to the IRS the total amount of money paid to any US resident whose ~~L$ sales~~ transactions reach certain thresholds in a calendar year.		This US tax law requires Linden Lab to report to the IRS the total amount of money paid to any US resident whose USD (US Dollar) credit transactions reach certain thresholds in a calendar year.
	For U.S. residents with 200 or more ~~L$ sale~~ transactions with a total amount of gross proceeds in excess of $20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year. We will send you a copy of this form.
			For the 2023 reporting year, U.S. residents with 200 or more processed credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year. We will send you a copy of this form.

			If you'd like more information directly from the IRS regarding section 6050W and the 1099-K form, please visit the IRS's official website for the latest information about 1099-Ks: [https://www.irs.gov/forms-pubs/about-form-1099-k https://www.irs.gov/forms-pubs/about-form-1099-k]

	===What is a Form 1099-K? Why would I receive one from Linden Lab, and when?===		===What is a Form 1099-K? Why would I receive one from Linden Lab, and when?===
	This form is used to report to the IRS the gross ~~proceeds earned from L$ sales~~ transactions in a calendar year. Linden Lab is required to file this form for US residents who reach certain transaction thresholds.		This form is used to report to the IRS the gross amounts of reportable process credit transactions in a calendar year. Linden Lab is required to file this form for US residents who reach certain process credit transaction thresholds.
	For U.S. residents with 200 or more ~~L$ sale~~ transactions with a total amount of gross proceeds in excess of $20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year.
			For U.S. residents with 200 or more process credit transactions with a total amount of gross proceeds in excess of US$20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year.

			Please note, certain US states may have state income tax thresholds that may apply as well. For more information about state income tax that may apply to you, please contaxt a tax professional or tax advisor or your state's income tax authorities.

	===If I have several Second Life accounts that do not meet the thresholds individually, but do so when combined, will my accounts be affected?===		===If I have several Second Life accounts that do not meet the thresholds individually, but do so when combined, will my accounts be affected?===
	Yes		Yes. US taxes apply to the individual person, not to individual Second Life avatars. Sorry!

	===I use PayPal with my Second Life account; why is the information on my Form 1099-K from Linden Lab different from the information on the form I receive from PayPal?===		===I use PayPal with my Second Life account; why is the information on my Form 1099-K from Linden Lab different from the information on the form I receive from PayPal?===
	The information on a Form 1099-K you receive from Linden Lab will be based only on the gross ~~proceeds from the sale~~ of L$. This is the information we are required to include on the form.		The information on a Form 1099-K you receive from Linden Lab will be based only on the gross amounts of reportable process credit transactions. This is the information we are required to include on the form.

	If you use PayPal with your Second Life account and also receive a 1099-K from PayPal, it would include payouts to your account as well as other activity you may have with PayPal.		If you use PayPal with your Second Life account and also receive a 1099-K from PayPal, it would include payouts to your account as well as other activity you may have with PayPal.

	It is your responsibility to inform the IRS of the profits or losses of your in-world business on IRS Schedule C.		It is your responsibility to inform the IRS of the profits or losses of your in-world business on IRS Schedule C.

	===What do if I believe there’s a mistake on the 1099-K that Linden Lab sent me?===		===What do if I believe there’s a mistake on the 1099-K that Linden Lab sent me?===
	~~Create~~ a ~~Case in~~ the [https://support.secondlife.com/ Support Portal].		Please create a support case at the [https://support.secondlife.com/ Support Portal] for further assistance.

	===How do I use the 1099-K for my tax return?===		===How do I use the 1099-K for my tax return?===
	~~Contact~~ your tax, legal, or professional advisor for guidance.		Please contact your tax, legal, or professional advisor for guidance. Tax law and taxes in general are complex and different for every jurisdiction. Linden Lab, Second Life and Tilia cannot provide tax advice that's specific for your needs, and we'd hate to give information that isn't helpful or correct in your individual tax situation.

			In the United States, the IRS has a page with resources for tax assistance and finding local tax help that may be useful for you: [https://www.irs.gov/help/let-us-help-you https://www.irs.gov/help/let-us-help-you]

	===If I have additional questions about the necessary forms, how can I ask them?===		===If I have additional questions about the necessary forms, how can I ask them?===
	~~Open the request in your~~ [https://support.secondlife.com/~~history~~/ ~~Case History~~] ~~in the Support Portal~~ and ~~reply~~ to ~~the Case~~ if ~~you have any related questions~~.		Please create a Support ticket to [https://support.secondlife.com/create-case/ contact our Support team] for assistance, and we'll do our best to help. As stated above, Linden Lab, Second Life and Tilia cannot provide tax advice that's specific for your needs, but we'll do our best to answer general questions or help with your concerns if we can.