I'm a software developer full time; but I do work as a free lancer on the side. I don't have “my own business”; I just do the work in my own name.
For freelance work last year, I updated a web application for an organization. Their payment to me was 10K. During the last month of the project I realized there was more work than I could do alone. So I offered to pay one of my friends 2K for doing a part of it.
My friend did his part well and the project got done. At the end of last year I was paid 10K. I deposited the money and then sent my friend a check for 2K. According to my bank statement, 2K left my account on 31 December 2015.
I got a 1099-MISC from the organization I did the work for; which had the amount they paid me of 10K.
But even though the form says that, I didn't really earn that much money last year. (After paying my friend, I got paid only 8K). Since it was contract work, taxes weren't taken out (and I don't want to pay taxes on money I didn't keep).
How should I record that in my taxes for this year? Should I just say I only made 8K? (That seems simple enough, but is that the right way to do it?)
Last edited by joe3 : 02-16-2015 at 01:58 PM.