I am married & my husband & I both have regular jobs where we receive W2's for our taxes. Last year myself & a friend of mine started selling Lia Sophia jewelry (one of those things where you go and do demonstrations at people's home & sell products) and due to the way the company sets you up as a consultant the "business" is only in my name. I received a 1099-misc today in the mail for our past years earnings of $3003.82, is there a percentage that can be figured out as to how much tax will need to be paid on that? Since the biz is just in my name I have to figure out the amount of tax so I can let my friend know how much she needs to contribute.
And can I make any deductions against this (ex: the supplies we have had to purchase over the year adds up to about $700-$1000, can that be deducted?)

THANK YOU THANK YOU THANK YOU for any help you can give me.

For reporting 1099-MISC income, with your tax return you will file schedule C (Form 1040). On this form you will report your income and business related expenses. The net income is taxable and is also subject to SE tax at 15.3%.

Meliann:

First, get together woth your friend and allocate how much of the $003.82 she earned. Then originate a Form 1099-MISC for THAT amout to HER. You deduct it on your Schedule C as sub-cotractor costs.

Once that is done, you BOTH can start deducting your business-related costs on your respective Schedules C, such as:

- business use of your car/truck.
- Business use of your cell phone.
- cost of goods sold.
- advertising costs.
- fees paid to the homeowner who hosted your demonstrations.

You MAY want to consider getting professional tax help!