I recently decided to sell a few software products on my site. I am going to be selling them directly on my site. The merchant system I will be using is paypal. Now, the agreement between me and the coder is a 50/50 deal. Which means, I will be paying half of the revenue that gets sent to my paypal into his account. In terms of taxes, how will this affect me? Do I need to tell paypal that I am only making half of the actual amount? Or is there something I need to report to the gov? Or since its a downloadable package, there is no need to worry about taxes? Any help would be appreciated. Thanks
Since you are making an income, what you earn is taxable. In your Income Statement, reflect the sum which is paid to coder. You just need to pay taxes on the final net income which you receive minus what you pay out.