How much will I be taxed on...?

Question

I have a desk job where I make around 31,000 a year.  On the side I make a small sum here and there as a juggler doing shows with my juggling troupe.  Usually it's small enough that it's not worth worrying about taxes.  However, we got a bigger job, and they wanted a tax ID number for our troup.  Since we don't have one, my only choice was to use my SS#.  So I sent them a W9 with my info on it, and they're cutting a check for $1500.  $330 of that has to be used for general liability insurance, and the rest is to be split between the three of us who are performing.  

I was wondering if someone could help me calculate how much I'll get taxed, so I know how much money to pay my two juggling partners.

Thanks!

card-ron · Answer

You will only be taxed on your net income from this venture.  You will report your total gross income of $1500, deduct the $330 you pay for insurance as a business expense, and deduct the amounts you pay your juggling partners.  You are then taxed on what is left.  Since you are only taxed on net income, you have $1,170 to split between yourselves.

On another note, your statement "Usually it's small enough that it's not worth worrying about taxes" is troubling.  Because you have another source of income which requires you to file a federal income tax return, you should be reporting all income made from your juggling regardless of the amount.

mrreliable3599 · Answer

You can't pay taxes for your partners.

Split it up among your partners. Then on your tax return, you'll deduct the amounts you paid them so you'll only owe on your profit.

You'll need to report the entire amount because you'll be issued a 1099 by the payer. Your Schedule C would look something like this, and would match the IRS database.

Revenue: $1,500
Insurance (   300)
Labor       (   800)

Net Profit $400

Then you'd pay tax on $400 and your return would match IRS records.

How much will I be taxed on...?

2 Antworten