Expenses FAQ

What does the approval process look like for expenses?

Once expenses are submitted, they need to be approved by a collective admin. Approved expenses are paid out by OSC twice a week, on Mondays and Thursdays, US time. If there are any issues with the payment or you can expect delays, an OSC admin will comment below the expense and you will receive an email about it (note comments are private to admins and payees). Generally approved expenses take less than a week to be paid out and to hit your account, but could be more if there are issues or the payment processor takes longer. Please see Submitting Expenses for more information on the approval process.

What about tax forms?

Open Source Collective must collect tax forms for any individual who invoices (this does not apply to reimbursements) over $600 in a single calendar year. Those individuals will be automatically issued a 1099.
When you submit an expense that puts you over the $600 threshold, you will be sent an email with a link to complete your tax form online. This email will come from HelloWorks and say "Open Collective has requested you to review and complete the Open Collective Tax Form".
Expenses will not be paid out to you until you submit the tax form.
If you don’t meet the $600 threshold, simply report your earnings as miscellaneous self-employment income when you file your taxes as described above.
Please note: If you are paid via Paypal, OSC will not issue you a 1099 because Paypal is responsible for that. PayPal issues 1099-K forms for those with total transactions of >$600. PayPal treats automated transactions as “Goods & Services” payments (like those made through Open Collective), even if it was actually a reimbursement. But don't worry - to the IRS, the actual nature of the payment is what matters.
The Form 1099-K is an IRS informational tax form that is used to report goods and services payments received by a business or individual in the calendar year. While banks and payment service providers like PayPal and Venmo are required by the IRS to send customers a Form-1099K if they meet the $600 threshold amount, there are certain amounts that may be included on the form that are generally excluded from gross income and therefore are not subject to income tax. This includes amounts sent as reimbursement.
If your PayPal payments through Open Collective were in relation to invoices for services or other taxable income, you can use the 1099-K from PayPal to report that income. If these payments were reimbursements, where you uploaded a receipt expense to Open Collective, then you do not need to report these amounts from the 1099-K for income tax purposes. If you have further questions, please speak to a tax advisor.

Reporting your income from OSC

For tax purposes, you will be treated as an independent contractor and, if you are a US person, you will be issued a 1099 if your earnings exceed $600. Here's a good explanation of how W9s work for independent contractors, and there's more info on what a 1099 is here.
If you don’t meet the $600 threshold, simply report your earnings as miscellaneous self-employment income when you file your taxes.
If you are not a US person, we will only keep your information on file and it's up to you to meet any tax reporting obligations in your country.

Do I have to use my real name?

We now have the option to differentiate between your public display name, and your private legal name.
We do need your real name as your legal name for our accounting records. This private legal name will only be visible to admins.
Details such as attachments, comments, the private note section, and the payout method information are only visible to the submitter of the request, the collective admin, and the fiscal host admin who processes the actual payment. Confidential details can also be included in those areas to ensure privacy.

How can we pay for large expenses that we cannot pay out-of-pocket and then get reimbursed later?

Depending on the size of the expense, you may be able to use a virtual card!
For large expenses that you cannot pay out-of-pocket, you can also have your vendors and service providers submit their invoices directly via your collective's page, or you can use the "invite expense" option, where you fill in the details and they recieve an email and then just need to confirm. So vendors can invoice OSC through your page to get paid, and then we pay them directly.
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