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RJHokie

Joined: 12/15/1999 Posts: 31130
Likes: 30721


It depends on how the agreement is structured.


If it’s earned income, then it’s subject to federal self employment taxes plus federal and state/local income taxes. But, if they can identify expenses paid wrt to earning that income, that’s deductible.

If it’s a royalty type payment it’s just subject to income taxes. There also might be expenses directly related to that which may be deducted against that income.

(In response to this post by EDGEMAN)

Posted: 09/08/2021 at 6:02PM



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Current Thread:
 
  
NIL question for the CPAs on this board -- EDGEMAN 09/08/2021 5:16PM
  No matter the school... -- GCHokie34 09/08/2021 9:10PM
  @GCHokie34 You might want to chime in. ** -- IB4TECH 09/08/2021 8:52PM
  It depends on how the agreement is structured. -- RJHokie 09/08/2021 6:02PM
  Would be subject to self employment tax. ** -- VT4ME 09/08/2021 5:56PM
  When I worked as an independent contractor... -- EDGEMAN 09/08/2021 8:23PM
  Which I believe runs around 15% ** -- VT ChemE 1986 09/08/2021 6:02PM
  Yep ** -- VT4ME 09/08/2021 7:09PM

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