Friday, January 23, 2015

Things about being as Apple Developer but none technical, probably a little bit

I fortunately made several bucks(Better than Nothing, right?) as an Apple Developer, I feel so excited and proud of my work once before realized I might need to file some tax form before April. Then, I emailed a technical from Apple asking if I will receive 1099 form from Apple.

The response was quick, and clear:
1st, Apple doesn't file 1099 to developers. They might file it to IRS.
2nd, They only file tax form for themselves only if this developer made $20000 and 200 transactions through the whole year.
Then, I found my income as Apple Developer is far from the basic requirement, so it's totally my choice whether to file it or not.

After published my App on App Store for almost one and half year, I found pre-market is one of the most important thing a team need to do before start the project, while after the initial idea generated. Once a great idea hatched on the very specific moment, most people feel excited and hope their app could be used by as many people as they can imagine. But the things are that's an extremely hard challenge to achieve even for some of team with long list of successful stories. Back to my story, this is what I did, and the difference before and after what I did.

I published the driving test preparation app in late October, 2013 as free, while in the app, I embedded iAd which is an advertisement platform from Apple guaranteed 70% income share if people click or view the ads in my app. Since my app targets the Chinese speaker living in California who doesn't have a driver license yet. In another word, it's a pretty small group because it has geo limit while language limit as well. So, every month if I could receive $4 from this app, then I'll feel so awarded, while I only got paid like one or three dollars usually. After WWDC2014, I found something called In-App Purchase, then I started to thinking what if I mark a price for the true value of my app, the parts which are driven people to download my app. I have 20 set of tests which helps prepare the test, while 7 of them are the most valuable sets. I asked my wife:"Do you think people will spend $4.99 on these 7 set of test, which could almost guarantee they will pass the exam?", then she said:"Why don't you sell them $1 for each set, then people could have their own choice while you could make more money." In that moment, I once again knew I have married to the right girl, who is not just beautiful, good at cooking, but also very intelligent, super smart. Then, I updated the app with 7 separate In-App Purchase as my wife suggested. This is the start moment when money start to flowing in. My sales jumps a lot comparing those milk tea bucks, but while it's still far from $20,000 Apple mentioned in the email.

So, based on my last year's experience, if the app targets a small group of user, making money through In-App Purchase will be much more efficient than the ads, while if the app targets a very wild group of user, then make the app free of charge will draw more users coming and using the app. Also, I have seen other apps make user download their sponsors' app to have enough credits to use extended features of the app. This is also a way of making a profit.

If you know some other good ways, please let me know. I've attached the email response from Apple Finance.
Will Apple send a U.S. Tax Form 1099-MISC for my sales?
 No. Sales on the App Store are sales by you, the developer of copyrighted works, to end users and Apple treats payments made to you for these sales as payments for products or goods, which are specifically exempt from reporting on Form 1099-MISC even though the payments may be reportable on a Form 1099-K and may be taxable income to you.
You are responsible for determining your own tax obligations with respect to these payments. If you are uncertain of your tax obligations, we recommend that you consult with a tax professional.
Will Apple send a U.S. Tax Form 1099-K for my sales?
 Apple will file Form 1099-K with the IRS and send you a copy if you meet the thresholds below. The Internal Revenue Code requires each Apple entity that acts as an agent or commissionaire for U.S. App developers to file Form 1099-K for U.S. App developers who meet the following thresholds in a calendar year: 
More than $20,000 in unadjusted gross sales, and
More than 200 transactions.
You are responsible for determining your own tax obligations with respect to these payments. If you are uncertain of your tax obligations, we recommend that you consult with a tax professional.

Thank you.

iTunes Finance

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