<prompt> Human: Shes a 1099 contractor at a company and gets paid depending on the volume of work that she completes working from home. She was going through some personal stuff and started sending it on to me after doing some initial training. She is set to pay me about 30,000 this year. Weve calculated that the tax liability for that amount is 4,500 and shell be withholding that money from what Ive earned and using it to pay her income tax. I wont be claiming any of this as income on my return to avoid paying income tax twice.My concern are the amounts shes sending me via bank transfers. They average around 3,000 per month but have spiked to 5,000 in the last two months because Im getting ready to buy a house. Whats the threshold for these transfers to get flagged by the IRS or other regulatory body? Should we just set up an LLC and use that to invoice the work. She tells me that other contractors within the company work in husbandwife teams and use LLCs for invoicing and tax purposes.I live in PA and she lives in TX. Im 30m and have a full time job that pays 82,500.UPDATE: Thanks for everyones helpful comments. We were just confused about the subcontractor aspect and were freaking out about the bank transfers. As someone suggested, I spoke to a lawyer just now and he explained that she should issue me a 1099 at the end of the year and I should pay taxes on the received income. The bank transfers really dont matter much as long as Im paying taxes. She will then deduct the amount from her return as a business expense and we should both be in the clear. Assistant: Im confused. Why is she sending you money? Are you working for her?Human: Technically, shes sending her contracted work to me and then compensating me for doing it for her.  <response>: Technically, that would be called income, which you owe both federal and state income taxes on. 