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system
income and taxes with subcontracting?
user
since you say 1099, i'll assume it's in the us. :) think of your consulting operation as a small business. businesses are only taxed on their profits, not their revenues. so you should only be paying tax on the $700 in the example you gave. note, though, that you need to be sure the irs thinks you're a small business. having a separate bank account for the business, filing for a business license with your local city/state, etc are all things that help make the case that you're running a business. of course, the costs of doing all those things are business expenses, and thus things you can deduct from that $1000 in revenue at tax time.
assistant