I paid taxes on the gross wages on my W2. My checks were sent to my agent who then took their cut and then sent me checks for the remainder. Why do I have to pay taxes on their cut? How do I account for this on my taxes? I have both W2's and 1099's for my income as an dance performer. I put the 1099's in the Business Income along with all my expenses. A tax professional told me I had to keep the deductions with the source of the money (W2 or 1099). I am confused.
The 1099-MISC is non-employee compensation and you report this income on Schedule C. The amount your agent deducted from this income as a fee is a deductible ordinary and business expense, so you are not being taxed on these agent commissions.
However, if you receive a W-2, you deduct the agents fees as an itemized deduction, so you may be paying tax on some of the fees you pay the agent.
Click here for information on Tax Considerations for Athletes and Entertainers
The 1099-MISC is non-employee compensation and you report this income on Schedule C. The amount your agent deducted from this income as a fee is a deductible ordinary and business expense, so you are not being taxed on these agent commissions.
However, if you receive a W-2, you deduct the agents fees as an itemized deduction, so you may be paying tax on some of the fees you pay the agent.
Click here for information on Tax Considerations for Athletes and Entertainers