I also understand accounting and legality may play a role.

he is offering to bump his offer from 12 and 15% to 14%and 17%.

@Cristal Ochoa @Leiah DotlichI will preface this with the fact that I have a legal background, specifically with estate planning and asset protection.

On June 7th, we sent an itemized list of deductions via text; he responded on June 8th, disagreeing and threatening legal action.

An LLC is useful for two things: anonymity and legal protection.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

This doesn't replace the need for a MSA that will capture additional clauses needed on a Contractor-SubContractor relationship, this is just a project specific form you would use in addition to the MSA (prepared by your Attorney):This template is for informational purposes only and does not constitute legal advice.

One common approach is to form a legal entity, such as an LLC, where both of you are equal partners.

If they pass that initial trial period, I offer a 6-12 month renewal. 

Quote from @Jim Bryant: This is why it's important to understand how the legal system works before investing in an area.