If I paid subcontractors $9000, why when I enter it under "Contract labor" does it only reduce my "tax due" by about $2000? Their work didn't increase my profit.

Their payments were really just a pass-through from the client to them, and wasn't an advantage to my profit. For a 1065, where else can I enter subcontract payments to get a 100% deduction?

191

Level 15

May 16, 2021 4:27:39 PM

It is not showing up as a $9000 deduction?

You aren't expecting your" tax due" to change by $9000, do you? The IRS is not going to pay your contractors for you. The $9000 deduction just means that $9000 is not subject to income tax.

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If I paid subcontractors $9000, why when I enter it under "Contract labor" does it only reduce my "tax due" by about $2000? Their work didn't increase my profit.