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December 6, 2020
Question

As a self employed counselor, can a business deduction be claimed on what is paid to the Counseling Center at which the work is performed?

  • December 6, 2020
  • 1 reply
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My husband is going to be starting as a self-employed counselor soon.  As an LLC, he will set his own rates, have his own clients, and be responsible for his own taxes, etc.  He will be contracted through a counseling center, though, that ultimately provides all of his needs to do business, including liability insurance.  The counseling center will get 30% of what he earns.  Will this 30% he owes to the center be considered a business expense that can be deducted from his gross income?

    1 reply

    VolvoGirl
    Employee
    December 6, 2020

    Yes if he first includes 100% as the income.  But not if he only reports the 70% he actually gets as income.

     

    Is his LLC a Single Member LLC that is a S corp?   If not he probably will report it as self employment income on Schedule C in your personal 1040 return.

     

    To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

     

    Here is some IRS reading material……

     

    IRS information on Self Employment

    http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

     

    Pulication 334, Tax Guide for Small Business

    http://www.irs.gov/pub/irs-pdf/p334.pdf

     

    Publication 535 Business Expenses

    http://www.irs.gov/pub/irs-pdf/p535.pdf