Let me start off by saying I have no idea what I'm doing here. The context is, I am making a game, and every month I make $400 or so from Patreon (people are my patrons, and they are paying me because they want to see the game be created). This money goes into my paypal account (there is no way to avoid this), and then i send this money to a business checking account I've created.
Starting this month, I've decided to partner with somebody on my game (an artist), and we are going to split the profits 50-50. Unfortunately, Patreon has no concept of splitting income. Every month, 100% of the profit will go to my PayPal. From PayPal (or maybe from my personal business checking account), I plan to send 50% of what I earn into my partner. This personal business account isn't anything special. It's just a separate checking account that I only use for business.
I'm worried about the tax implications of getting 100% of the income and then sending 50% to someone. Will the IRS look at this and say I should be taxed on 100%? It's seems like there should be a way to only pay on the income that I keep at the end of the day.
How do I avoid paying taxes on 100% of the income when I only keep 50%?
I do not have and LLC... I don't even have a DBA. I live in California.
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