I have a $10000 project. I subcontract the entire project to a subcontractor and pays that person $9999. This means my net gain (or profit) is $1.
If I submit that info to the IRS when doing taxes, will that trigger an audit?
Is there a money threshold on how much my budget is when subcontracting and/or how much I can deduct subcontracting/outsourcing costs from the gross income (which would be $10000 in this case)?
This question is "in theory". I understand that in practice, that $1 net gain would be taken up by other costs like marketing, etc, but let's just assume none of those extra stuff exist. This is not about how to operate a business or how to optimize the cost of subcontracting. I'm asking this from a tax perspective.