Independent contractor paying referral agency a 30% of my money from every job where can I deduct these

Forum|Forum|6 years ago
June 3, 2019
1 reply
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So where do I deduct these fees

TurboTax Self Employed Online

Best answer by AmyT

You can deduct this as an Other Miscellaneous Expense.

When you get to the screen that asks "What kind of expenses did you have for <your business>?", choose the drop-down for "Less common expenses" and select "Other miscellaneous expenses"
Click "Continue"
Scroll down to Expenses; find "Other miscellaneous expenses"; click on the blue Start button
Enter a description such as "Referral fees" and enter the expenses that you paid during the year.

AmyTAnswer

Employee

You can deduct this as an Other Miscellaneous Expense.

When you get to the screen that asks "What kind of expenses did you have for <your business>?", choose the drop-down for "Less common expenses" and select "Other miscellaneous expenses"
Click "Continue"
Scroll down to Expenses; find "Other miscellaneous expenses"; click on the blue Start button
Enter a description such as "Referral fees" and enter the expenses that you paid during the year.

raynskye44

I'm an independent contractor as a real estate agent, and I also pay 30% commission to a referral partner when I close leads that they provide to me. In real estate, though, the broker pays all the commissions because everything is paid to them and then they divvy it out so to speak, even the referral agreement is between the Broker and the referring party and myself (agent of Broker). Am I still entitled to deduct the referral fee that I pay in this scenario?

GeorgeM777

It is not clear whether you can deduct the referral fee. If the managing broker is the one that receives all the commissions and pays the agents their respective share, and pays the referring agent/party their respective share, then it's likely in that scenario that the managing broker is the one that takes the deduction for paying the referral fee. Perhaps to render a more definitive answer we need to know what the agreement says about payment of the referral fee. If you can provide that information, that might better assist us in responding to your tax question.

@raynskye44

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