Location: New York
I manage the OF accounts of three independent creators. Combined, this whole “business” makes about $1200-$1500/mo gross. I have an LLC in my name, I totally control all the accounts, and with each creator we split the gross income 60/40 in their favor, from their profile/account.
I spoke to a lawyer today about this “business”, they recommended I keep the business as is, report the income on my taxes, and that’s it. I guess I’m paranoid, because I feel like there has to be more. I’ve read some articles about social media managers, and I’ve seen that many times they actually work for the creators under contracts, and are paid a rate. My setup is almost the opposite of that, so I’m worried about potential legal issues. What do you guys think? Should I maybe get a second opinion from another lawyer?
Comments
You haven’t explained what legal issues you’re concerned about. There are infinite possible legal issues, so it’s not clear which ones you are referring to.
Do you have a good CPA? Making sure you follow all financial laws and tax laws is obviously very important. Do your contracts with these creators cover term and copyright?
It’s not wrong to have a nonstandard arrangement. Sometimes there are good reasons to do it the standard way but this should work. I’m a tax professional and business advisor and I’m general (this is not tax advice) and I don’t see anything wrong with your setup.
Talk to a tax pro – ideally a CPA or EA – to make sure you’re planning to pay taxes, tracking your deductions, and know how to issue 1099s.