1099-NEC for subcontractor
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
Vlaja
Level 1

1099-NEC for subcontractor

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!

3 Replies
VolvoGirl
Level 15

1099-NEC for subcontractor

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

npierson7
Employee Tax Expert

1099-NEC for subcontractor

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. 

VolvoGirl
Level 15

1099-NEC for subcontractor

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.

 

Dynamic AdsDynamic Ads
v
Privacy Settings