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Can someone help me with cpa tax information?

Discussion in 'Business & Tax Advice' started by telio054, Sep 2, 2009.

  1. telio054

    telio054 BANNED BANNED

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    Hmm so my cousin just brought up an interesting question. If I have someone running my cpa accounts and I am getting a 30% cut. How do I handle taxes for that? Like will I be taxed on the entire 100% or just my 30% income after paying the person? If this is something that is going to mess me up I would love it if someone could please help me out with some info so that I can get out before its too late. So far i've made some money with it and I am using that money to fund my own white hat stuff (the original reason for starting this). Does anyone have any information that can help me out?
     
  2. telio054

    telio054 BANNED BANNED

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    bump...anyone? Please this information could help me ALOT.
     
  3. XrayMan

    XrayMan Newbie

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    Well, they need to send you a invoice for the "traffic" they sent you. That way you can write off the 70% .
     
  4. Jimmyvee

    Jimmyvee Jr. VIP Jr. VIP Premium Member

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    From my understanding, you can write off the 30% as a "Cost of doing business." It an expense that you incurred for running your business. Remember you only pay taxes on earned income...meaning you take your gross income subtract your expenses and whatever you have left over is your earned income, that's what gets taxed. Obviously, contact your tax person to make the right choices.
     
  5. telio054

    telio054 BANNED BANNED

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    ok so that 70% can be written off as a cost of doing business? I have kept all receipts of payment and such to be able to prove that I am paying out that 70%. Is there anything else you guys would suggest doing?
     
  6. bizwoman

    bizwoman Registered Member

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    There a several things that will impact what happens. First, you didn't mention whether you were a sole proprietorship, corporation, llc, etc. If you applied to the cpa networks using your social security number and did not register as a business entity ( corporation, llc), the company's will provide a 1099 form showing that you were paid the monies and you will be responsible for paying taxes as a sole proprietor which is the highest tax bracket for a small business.

    Second, I'm not sure how you would write that 70% off as a cost of doing business. You have to report what the specific expense was ( contract labor, equipment fees, supplies, etc.) If you want to write the 70% as payments to a contractor, protect yourself and make sure you have a written agreement stating that he/she agrees to work as an independent contractor because the 70% will then be taxed as income to that person not you. It can get really messy with the IRS if you tell them that the other person received the 70% as contract fees and they want to tax him for it and he kicks rocks about the taxes. Make sure you are both in agreement about this.
     
  7. JonesersRX7

    JonesersRX7 Regular Member

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    Yeah... and you should have gotten a W9 from him/her so that you can 1099 him/her. That would be the easiest way to show that you paid it out as an expense.