Combined H&W Sch C

[David]

New clients each receive a 1099-MISC from the same MLM business with each one's appropriate ssn reported on the 1099.

 

The 2012 tax return shows a Sch C with both their names reported and reporting 100% of all revenue and expenses.

 

Their records report all expenses combined.

 

I am trying to figure out how I can report the Sch C in ATX the same way the previous CPA did but I can't figure it out.

 

Anyone know how to do this and how to handle the 1099s reported to each TP's ssn?

 

Thanks.

[mcb39]

You used to be able to just click a box on the top of the screen and it would do the division; assuming that it was equal.  That has been gone for a long time.  You can either give them each a schedule C and split the expenses or enter both 1099 Misc as they are reported.  They "should" combine on the C.  The only problem I foresee is the issue of two different SS.

[jklcpa]

If they are truly running one business, they should be filing a partnership return, or they might be able to be a qualified joint venture and report on separate Sch Cs and Sch SEs:

 

http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Small-Business,-Self-Employed,-Other-Business/Entities/Entities

[jklcpa]

Another page from IRS site:

 

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Husband-and-Wife-Business

[ADGFINANCIAL]

It still works that way in ProSeries but suggests a partnership in the help screen.

[Abby Normal]

Unfortunately, the IRS decided that Sch Cs cannot be joint. That would have been the simpler way to go: joint Sch C with 2 SE forms. They want you to split all income and expense items on two separate sch Cs. I don't have time for that, so I have the Sch C taxpayer issue a 1099MISC to the spouse taxpayer for roughly half the profits. The then spouse has a sch C with just income and no expenses.

 

The only reason for all this rigmarole is for both spouses to get Social Security credit.

[kcjenkins]

Well, there are also some good 'legal' reasons as well.  But yes, we used to have a box we could check for a 'joint' Sch C, and it did one C and two SEs, splitting the income between the two.  No more.  

[joanmcq]

That one was really only available in community property states.

[kcjenkins]

Yes, but in practice, the IRS accepted them in non CP states,  Had 3 that I used that box with, for years, and never a peep from the IRS. 

[joanmcq]

True.

[mcb39]

I don't get what the difference is.   I have one H/W business that I have to prepare and charge for a 1065 and the business is so minimal it is not really worth it to them.  Thankfully, it was already being done that way when they came to me; so they were used to paying for it. (much more than I charge); but it is a pain.  The IRS gets the same amount of tax either way.  I loved that "check the box"  I am in a CPS.