Hello, I've been emailing the support email for the past two months, and have also inquired about this last year as well to no response. So now I'm trying a forum post. Ticket ID is 254165.
My tax withholding rate is set to 24%, and itchio has been withholding that amount from all of my payouts. However, none of that withheld money has been reported on either the 1099s I received this year or last year since I started using Itchio - it only lists what I was paid AFTER the withholding. To my understanding, and I've also checked with a professional on this, it then looks I never paid income tax on that amount and would theoretically have to pay it AGAIN on the royalties I did receive. I'd be fine with the 24% withholding if it were properly being reported, but from my end it just looks like that money is never accounted for.
To make this extra clear, this is an example of what's happening. If my payout is $100, $24 is being withheld by itchio as "tax withheld." To simplify, we'll ignore the other fee categories. So I receive $76 as my payout. The 1099 I get at the end of the year SHOULD say $100 in royalties income with $24 in federal tax withheld. However what I get says $76 in royalties income and $0 in federal tax withheld. Which then leaves me to pay an additional 24% of the $76 I received, and the $24 that never reached my bank account isn't reported anywhere from my POV.
I've emailed the company that delivers the forms, and I've emailed support. I've not gotten a proper response from either. I've retaken the tax form survey which didn't seem to do anything. Ideally I'd love to just have the withholding rate removed and I can pay taxes myself come tax season. At the very least I'd like to know my future tax forms can be correct so my withheld money isn't disappearing for no good reason. It'd be hard to use a platform knowing a quarter of my earnings is being taken but not applied towards what it's stated to be for.