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!
You'll need to sign in or create an account to connect with an expert.
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
It sounds correct. If you enter $10,000 under Contract labor, your income will be decreased by the amount and your tax liability will be decreased accordingly.
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.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
hdefontes
New Member
dibbeena1
Level 2
tiffanyraewebb
New Member
jjkim1
New Member
lbestram
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.