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Old 07-24-2016, 09:59 PM
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Referral Fee Taxation

I will be starting a single member LLC which will rely very heavily on referrals. If I am going to pay 40% of the sale cost as a referral fee am I taxed for the full cost of the sale or only the 60% that will be going to me?



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Old 07-27-2016, 08:10 PM
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I will be starting a single member LLC which will rely very heavily on referrals. If I am going to pay 40% of the sale cost as a referral fee am I taxed for the full cost of the sale ====>yes aslongas it is biz related ordinary and necessary exp; but you can claim 40% of the sale cost as a referral fee on your return.

or only the 60% that will be going to me? ======>So,you?ll actually earn 60% of the sale as the 40% of your referral fee ?ll be tax deductible on your Sch C and you need to issue him as a non employee, 1099 aslongas the amount $600 or more.



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