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You can be paid a fee that is tax deductible by him and taxable to you. Or, his payment could be nontaxable to you and non deductible by him. You have that choice.
If you choose that your payment is taxable, you could have to pay 15.3% self employment tax, and income tax. If this is your sole income, you might have tax credits. Let's assume you don't.
He gets a tax deduction, and you have taxes to pay. Doing it this way likely costs the two of you some tax cost (he gets a tax benefit, but you have a high tax to pay). The exact tax rates would be needed to figure it out. It's likely there is a meet tax to pay.
It would be better if he gave you a gift. No tax deduction, but no tax to you either. Let's say he wanted to pay you $20,000. He gets say $6,000 in tax deductions. You pay $7,000 in total taxes. If he gives you $14,000, you get an extra $1,000 net.
You do not need to be a business, and you do not need workers compensation coverage.
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