ThomasM125
Expert Alumni

Deductions & credits

By investment money, do you mean someone took an ownership in the venture, or do you mean you borrowed money?

 

If someone paid you money and there wasn't an ownership interest involved and you don't need to pay it back, then it would be sales revenue that you need to report as business income. You can deduct the money your paid the other employees as research and development expenses, as mention earlier.

 

Since you are filing as a sole proprietor, the difference between the business income and expenses would be your taxable income, regardless of what you paid yourself. 

 

 

 

 

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