June --
I am getting ready to split a commission with an ex partner. The commission is about $2000. If I turn around and write her a check for half, how much tax will I be responsible for come April?
Jill from Toms River, NJ
Jill --
At the end of 2007 you will need to prepare a Form 1099-MISC stating the amount you paid to your ex-partner. That form gets sent to the government and your partner.
The amount paid the partner will be a business deduction. On your tax return the total received will be part of your gross income. You subtract as a business expense the amount paid your partner. That will leave you with net income. You will pay tax on your net income, that means, on your 1/2 of the payment.
-- June
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