Sole proprietor paying another sole proprietor

[gmc2287]

Hello,

So this year, I was hired to do some freelance work and payment was sent to my LLC. For some of that freelance work, I then outsourced it and paid it to another freelancer to their LLC.

How does this work for my taxes? I know to send the 1099-NEC to the other freelancer, but how will this affect my taxes?

Thank you so much!

[Anonymous_]

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@gmc2287 wrote:

I know to send the 1099-NEC to the other freelancer, but how will this affect my taxes?

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Enter the figure you paid as "contract labor" (Schedule C, Line 11) and, as you mentioned, issue a 1099-NEC if you paid the other freelancer $600 or more.

See https://www.irs.gov/instructions/i1040sc#idm140094051160816