I have a talent agency based in California with Japanese contractors who are not US residents or have never lived in the US. They are talents who perform mainly in Japan, US, and Europe. I manage their professional activities and all their income goes through me while I take 10% as a commission and 90% as their income. The bank transaction is done electronically.
How do I file taxes for business? (no 1099 involved here)
Is your agency a corporation, LLC, or sole proprietorship?
If corporation, file business tax returns: form 1120 or 1120-S for federal, 100 or 100-S for California. Profits from the business may get reported on your personal federal 1040 and CA 540 or 540-NR (if the company distributes profits to you, or is an S corporation).
If an LLC, file business tax returns: 1065 for federal, and I don't remember what it is for CA.
If a sole proprietorship, put the business information on Schedule C.
The total money you receive will be revenue, the 90% you pay out will be payment to contractors, and the remaining 10% is your profit. But you have other expenses as well such as driving expenses, telephone expenses, travel expenses, depreciation for use of computer, business license, state tax paid, etc.,
For both corporations and LLC's you have to file statement of information returns. For corporations you have to file one at the start of the year, along with a small fee (like $25 or something). For LLC's I think you file every 2 years.
Note that California corporations and LLC's have a minimum tax of $800, even if you suffer a loss. But for corporations the annual tax is waived for the first year of business. So for C corporations the tax is the smaller of $800 and 8.84% of your profits, but for the first year it is just 8.84% of profits.
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