Earlier this year I started a consulting business as a side gig doing sales, marketing, and business management for business owners. My client and I are trying to determine the easiest and of course legal way for him and I to file our taxes after this year. He paid me for my time but also paid for all business related expenses that came out of my business checking account. He his an older gentlemen and not tech savvy so it was easier this way since we are selling his products on Amazon. So our question is this: how should the 1099 be written at the end of the year? The full amount paid or just the amount paid for my time?
In other words: He will have paid me around $24,000 by December 31st. $12,000-ish for me and $12,000 went to business expenses such as Amazon FBA fees, advertising on Amazon, LLC creation, Google Workspace, website creation and monthly fee, domain purchase etc.
Should we:
A) Write the 1099 for the full $24,000 and he put on his tax return "paid $24,000 for sales, marketing, and business management" and then I file the $24,000 on my taxes but deduct all the business related expenses that came out since the full $24,000 wasn't income
OR
B) Write the 1099 for $12,000 and then compile all the receipts and send to him so he can put "$12,000 to a consultant" and then deduct all the individual and monthly expenses on his taxes.
