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Can someone provide me information on how taxes are impacted in the following scenario:

  • I am a web developer
  • My clients are charged for infrastructure setup fees (such as hostnames, servers, etc)
  • These fees are reflected in my invoice in addition to my hourly rate Paypal sees it all as income, but a large percentage is not income since it is fees for infrastructure/supplies for my client (that they could have paid for).

Is there documentation on how I file this difference come tax season? Is it really all considered income since I am not actually gaining any profit? I am using Paypal to do invoicing (so they send me a 1099-K).

Thanks

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You'll include the various costs you incur as expenses when you file your taxes and they won't be included in your taxable income.

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