Roku Developer Program

[cocotower]

Roku issued me a 1099-K for the first time in years of running numerous revenue-earning channels.  If you met the IRS criteria for reporting your online transactions, expect a 1099.  However, beware of the sticker shock.

I was shocked to see that the whole amount ROKU collected for the year is reported as YOUR income even though you only get 80% of it.  Hopefully the IRS Schedule C has the right lines to deduct the 20% that Roku kept as their income, or I'm going to be one very mad puppy dog.

Can someone who's filed theirs before enlighten me without giving any details of your 1099?

[renojim]

I went through this last year and was very confused.  Not only does the 1099-K reflect the total amount Roku collected (including sales tax), but it also shows the dates of when they collected it, not when the developer received it, so everything is off by a month.  It's a very poor indication of revenue received for the year.  Last year I "lied" on my return and just entered the 1099-K amount as I thought it should be.  I'm still waiting for a letter from the IRS.  I have to go back and amend my return, but my research didn't show exactly how to handle this.  I may just call the difference a "miscellaneous expense" or "adjustment" or something like that.  I think Uber drivers and people that sell on ebay go through the same thing, so the information on how to handle it should be out there without having to hire a professional (which I refuse to do).

I'd be interested to know what others have done to reconcile the difference between what the 1099-K shows and reality.

[cocotower]

Just got off the phone and am pleased to learn that the 20% fee assessed by Roku is an expense to the developer and therefore deductable as such along with all your other business expenses, but the actual information from the 1099-k is what should be provided on your Schedule C and related IRS forms as your Gross income.  It'll naturally get whittled down to a significantly smaller Net income.

[renojim]

Don't just take 20% off of the 1099-K amount.  As I said, it also includes sales tax collected and it covers a period that isn't really 2021 as far as your income goes.

[cocotower]

Nowhere did I say that only the 20% fee expense is deductable.  Also, you don't get to deduct December just because the money for December didn't hit your bank account until Jan 26th or roundabout.  In that case you'd be falsely claiming you only earned 11 months of revenue.  Even if you got brilliant and added December for the previous tax year it's the wrong way to report the 1099.

[renojim]

You sound defensive.  I was just trying to help you and anyone else that might find this thread.  My point is that the 1099-K you receive bears little resemblance to the actual income you received in 2021.  How you decide to report the difference is up to you.

[Komag]

Some of it depends on how you do your accounting. If you do "cash" accounting (which is most common for individual business owners or small businesses), then you would count the money when you actually get it. This is opposed to "accrual" accounting which is when you count income that you book but may or may not have yet actually received. It sounds like Roku's 1099 is reflecting an "accrual" approach, and I don't know how you can deal with the difference if you are using a "cash" approach.