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adamjgold
Returning Member

paying others

I have a small business with a partner. I have received payment through Venmo, and used Venmo to pay my partner. How do I handle this when I receive the 1099-k?

3 Replies
LaunieR_EA101
Employee Tax Expert

paying others

When you receive a 1099-K this income for your business should be included in your income for the business. If your business is set up as a partnership only the actual income for the business will be reported on the partnership return.  Any expenses you paid out for the business will be included in your expenses specific to the type of work or product someone else provided you. If your filing a partnership return any money sent to your partner from you (if it's just splitting income) will not be added a second time into the partnership income. For more information on what a US Partnership return is see this helpful article: https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-forms/form-1065-u-return-partnership... . If you need information on how and what to file with the IRS for a partnership here is a great resource from the IRS: https://www.irs.gov/businesses/partnerships

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adamjgold
Returning Member

paying others

Thank you! This is not an official partnership. It's more of a helper for part-time music lessons. For ever 10 dollars I receive, I pay her 2. Music students pay me using Venmo. Can I treat the money I pay my helper as business expenses?

LaunieR_EA101
Employee Tax Expert

paying others

In that case it sounds like this person is more of an employee or a 1099-NEC worker. You can deduct any of their income you pay them as an expense. You may also need to report the amounts paid to them on a 1099-NEC of as W2 income depending on how you have both set up their employment situation with you. They will likely need to report this income on their personal taxes. Quickbooks has great information about the different between a 1099 and W2 https://quickbooks.intuit.com/r/payroll/1099-vs-w2/ . Here is more information on how to file taxes with a 1099-NEC https://turbotax.intuit.com/tax-tips/self-employment-taxes/how-to-file-taxes-with-irs-form-1099-misc... . I hope this helps you further. 

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