I am an independent contractor, and I received a 1099 for the gigs I performed with another musician. I only got half of what is stated on the 1099. How should I report/file taxes?
You received 1099s for the gigs you played. You shared the money with another musician who played with you. What you need to do is ask him for his Social Security number and prepare a 1099-MISC for his share. When you file your tax return, you will use Schedule C. You will put the amount of the 1099s you received as income, and under contract labor you will put the 1099 amount for the other musician. You will subtract the other musician’s 1099 from the total on the Schedule C. It will show your portion of the gig income. You will pay taxes on this amount. (also, remember to calculate your self-employment tax on schedule SE Social Security). The following is an example:
1099 received for all your gigs $20,000
1099 issued to other performer $10,000
Your income $10,000
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Answered by: Carlo J. Silvesti, CPA, is an assistant professor of accounting at Gwynedd Mercy University in Gwynedd Valley, Pa.