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Old 02-16-2015, 01:57 PM
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1099-MISC question

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. Reason: spelling


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Old 02-16-2015, 05:37 PM
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Quote:
Originally Posted by joe3 View Post
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?)
You report the whole $10K on line 1 of Sch C of 1040 and deduct $2K by reporting it on line 11, so your net taxable self employment income inthis caae is $8K, not $10k. you need to issue him 1099misc by jan 31 2015 and also send a copy of 1099 misc/1096 to irs by march 31 2015



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