I am a 1099 contract therapist for a local for-profit mental health agency. They take 40% of my billed services, acting more or less as a billing clearinghouse, that 40% being their fee. Can I deduct this cost on my Schedule C?

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AI accountant’s answer:

Absolutely! As a 1099 contractor, you're essentially running your own business. The 40% fee that the mental health agency charges you for their billing services is a business expense. You can deduct this cost on your Schedule C as a "Commissions and fees" expense. Just make sure to keep a record of these payments in case of any future inquiries by the IRS.

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