Your freelance business goes on schedule C. Report revenues on line 1, 80% payouts to subcontractors on line 11, Contract Labor, and other expenses as appropriate. Net profit is carried over to your 1040 income tax return and schedule SE, .where you will pay 12.23% of your net profit. You need to make quarterly income tax payments if your withholding from regular employment (if any) will be less than 90% of your income tax for the year and your income tax for the year will be more than $1000. There is an estimated tax worksheet for this.Ifu00a0 you pay a US subcontractor more than $600, you must report it on a 1099u00a0 at year end. You don't have to report anything on foreignu00a0 subcontractors. You will not need an employer ID. You can give clients your SSN for them to put on 1099s. Reseller ID is for sales to customers within your state, if it charges sales tax on custom software services (not to be confused with shrinkwrap software).. Many states do not.Addendum:Ifu00a0 your net profit plus other income will be less than $8000 for the year,u00a0 you will not have file quarterly and your only tax at year end will beu00a0 the 12% self-employment tax. Your state income tax will probably be zerou00a0 as well.Self-employment tax is a retirement plan called Social Security. You will get it back when you are old.