The Tax Information section helps you maintain accurate tax records and ensure compliance with relevant regulations. Properly configured tax information is essential for your business operations on the Buddy platform, affecting everything from payment processing to financial reporting.
Watch our quick tutorial to learn how to keep your tax information up to date 👇🏻
Tax Identification Management
Managing your tax identity on the platform ensures proper financial reporting and compliance. The platform adapts the required information based on your business location and type, ensuring you provide all necessary details for your jurisdiction.
Business Identity Information
Your business's legal identity forms the foundation of your tax profile. This includes several key components that must be kept current:
Legal Business Name
Must match your official registration documents
Used for all tax-related communications
Required for financial reporting
Subject to verification during updates
When updating your legal business name, the change goes through an admin review process to maintain platform integrity. During this review, your business continues operating normally, and you'll receive notification once the change is approved.
Tax Classification
Proper tax classification ensures accurate reporting and compliance. The platform supports various business structures:
Sole Proprietorship
Limited Liability Company (LLC)
Limited Liability Partnership (LLP)
C Corporation
Partnership
Non-profit Organization
Your selection determines which tax forms and documentation you need to provide, as well as how your income is reported.
Tax Classifications:
Sole Proprietorship
C Corporation
S Corporation
Partnership
Non-profit Organization
Tax Identification Numbers
For U.S. businesses, this means providing your:
Employer Identification Number (EIN) in XX-XXXXXXX format
Completed W9 form for tax reporting
Additional state tax IDs if required
W9 form download link: https://www.irs.gov/pub/irs-pdf/fw9.pdf
For businesses in other countries:
Businesses from countries other than the US need to upload a different form
W-8BEN form needs to be uploaded if you are an individual, available here: https://www.irs.gov/pub/irs-pdf/fw8ben.pdf
W-8BEN-E form needs to be uploaded if you are a business, available here: https://www.irs.gov/pub/irs-pdf/fw8bene.pdf
Required Documentation
Document Management
The platform provides a secure system for managing your tax documents:
W9 Form (US Businesses), and W-8BEN / W-8BEN-E Form (for non-US Businesses)
Download blank form directly from platform
Upload completed form in PDF format
Update when information changes
Maintain version history for your records
Frequently Asked Questions
Frequently Asked Questions
Platform Tax Responsibilities
Q: What are Buddy's tax responsibilities as a marketplace facilitator?
A: As a U.S. marketplace facilitator, Buddy handles two distinct areas of tax compliance:
Sales Tax Compliance: We collect, report, and remit sales tax where applicable under state laws. If a state considers certain activities or services taxable, we handle the sales tax on those bookings and remit it directly to tax authorities on your behalf. You don't need to take any action for sales tax compliance.
1099 Reporting: Because we process payouts to your business, we're required to comply with IRS information reporting rules. We collect W-9 forms from U.S.-based businesses to gather legal names and tax IDs, enabling us to issue 1099-K or 1099-NEC forms at year-end if your earnings exceed IRS thresholds.
Q: Do you withhold income taxes from my payouts?
A: No, we do not withhold any income taxes from your payouts. Tax payment and filing on that income remains your responsibility. We only handle sales tax collection and remittance as required by state laws, and provide 1099 reporting for IRS compliance.
Tax Setup
Q: What happens if my tax information changes?
A: When your tax information changes:
Update your profile immediately
Provide new documentation
Complete verification if required
Maintain records of changes
The platform helps track these changes and ensures continuous compliance while updates are processed.
Q: How do I handle multiple tax jurisdictions?
A: For businesses operating across multiple jurisdictions:
Provide primary tax location
When you create activities select the correct Activity Location so that the system can apply the correct tax rates. More information is available here.
If your business is registered separately in multiple countries, you need to register multiple accounts on the booking platform. Reach out to support for further clarification.
Q: I am a U.S. citizen but a full-time resident of another country. How should I handle tax documentation?
A: Since you're a U.S. citizen, we'll need a completed W-9 form on file regardless of your residence. If your payments meet IRS reporting thresholds, we may be required to issue you a 1099. U.S. citizens are required to report global income, and the W-9 enables us to provide proper 1099-K reporting as a payment processor.
Documentation Requirements
Q: What tax documents should I keep updated?
A: Essential documents include:
Tax identification forms (W-9, W-8BEN, W-8BEN-E)
Business registration certificates
State/local tax permits
Keep these documents current and readily available in your platform profile.
Q: How often should I review my tax information?
A: Regular tax information reviews should occur:
Annually at minimum
When business details change
During tax season preparation
When regulations update
Q: What special considerations apply to non-profit organizations?
A: For non-profit organizations:
Complete and upload a W-9 form (check "C Corporation" box)
You typically won't receive a 1099 from payment processors
Sales tax may still apply unless you have state-specific exemption certificates
Non-profit status doesn't automatically exempt you from sales tax - you must provide valid state-specific exemption certificates to qualify for sales tax exemption
Compliance and Verification
Q: How do I ensure my tax setup is correct?
A: Verify your tax setup by:
Reviewing all entered information
Checking document accuracy
Confirming tax classifications
Testing report generation
Consider having a tax professional review your setup.
Q: What if I find errors in my tax information?
A: To correct tax information errors you can update/upload the correct information/form from the tax information page.
Contact platform support if you need assistance with corrections.
International Considerations
Q: How do I handle international tax requirements?
A: Buddy handles tax reporting for international businesses in the US. You need to make sure you upload the correct tax information form.
Q: I am a business NOT based in the US. Which document should I upload?
A: For businesses that are not based in the US you need to upload form W-8BEN or W-8BEN-E based on the type of business.
W-8BEN if you are an individual
W-8BEN-E if you are a business
The system handles different tax systems appropriately.