Need help with using paypal with a subscription product

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TDManager87

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I got a deal with a friend that is for a product we are going to start selling and its a monthly subscription fee of $50. However, we are trying to figure out what is the best solution to make sure we split the profits and get 50/50 each?

I just got a verified paypal account, and he has a paypal account. Is there anyway we can work out something, where we each get $25, because I know if I just received the $50, I will be taxed, and that can get tricky.

I just wanted to know what would be a good way to handle this.
 
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TDManager87 said:
I got a deal with a friend that is for a product we are going to start selling and its a monthly subscription fee of $50. However, we are trying to figure out what is the best solution to make sure we split the profits and get 50/50 each?

I just got a verified paypal account, and he has a paypal account. Is there anyway we can work out something, where we each get $25, because I know if I just received the $50, I will be taxed, and that can get tricky.

I just wanted to know what would be a good way to handle this.
Click to expand...

I know you can alternate payments with RAP and there are probably a few others out there as well. There is no way to do it through paypal though.

Taxes are not really an issue, you get taxed on profits not how much cash you collect so collecting the money then paying it out to your partner just like you would affiliate commissions or any other expense and then claiming it as as a business expense is not really a problem.
 
Be careful regarding the reported taxable income ... if you are splitting profits YOU need to show the contributions to HIM on your Schedule C and probably issue an IRS 1099 to HIM.

Check with your local accountant or bookkeeper to verify.

JQ
 
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