2

Me and my brother are doing work for a friend. The friend paid me the full amount, and I am supposed to give 50% to my brother. How do I handle this to ensure that I do it correctly and don't get double-taxed? I do not have a corp setup. My friend paid me into my personal checking account. I am in the USA.

  • does your friend have a business, and will he be claiming the expense? – mhoran_psprep May 30 '18 at 23:38
1

It doesn't matter. As far as the IRS goes...assuming this is a one-time thing, simply report the amount you kept (ie: the amount you didn't give to your brother). The IRS isn't even going to look at the check/debit/whatever, much less be like "wait a sec, Nate said he only received half as much!" -- and even if for some bizarre reason they ever did, the first two sentences of your question would satisfy them as an explanation.

| improve this answer | |
  • 1
    Getting the brother to write a receipt wouldn't hurt. – Rupert Morrish May 30 '18 at 23:58
  • 1
    If you want a paper trail just in case, a receipt would help. You could also write him a check. That'd give you evidence of payment without requiring he do anything but cash/deposit it. – cHao May 31 '18 at 14:53

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.