I received 1099-NEC for my contract and issued another 1099-NEC to my subcotractor. If I earned e.g. $100k for my contact and paid e.g. $10k to my subcontractor, when I enter 10k under Contract Labor, my tax goes down by ~2k. Is that all? Is there any other place/form where I can enter the amount that I paid to my subcontractor and deduct that amount from my earnings? Thanks!
That's about right. You pay 15.3% SE tax on 92.35% of your Net Profit.
You were paying 100,000 x 92.35% x 15.3% = 14,130 SE Tax
Then on 90,000 you pay x 92.35% x 15.3% = 12,717 SE Tax
Oh and that is in addition to the regular income tax on your total taxable income which includes the Net Profit.
You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040. It will be on Schedule 1 line 14 which goes to 1040 line 10a. And subtract the QBI Adjustment on 1040 line 13.