"Sam" <samhunt90[at]hotmail.com> wrote:

- quote -

You may combine the income and expense from similar
activities in the same business.

For example, I do tax prep, accounting and training within
the same business. I am not permitted to include a different
activity such as the sale of a crafted product on the same
schedule C.

You may not combine two different people's businesses on the
same schedule C. One of the reasons has to do with a loss
from one spouse offsetting the profit from the other and
reducing self-employment tax illegally. There are other
reasons, one of which you have described regarding
accelerated depreciation.

--
Sincerely,
Joanne

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Joel Berry, CPA wrote:

- quote -

It depends on what "unrelated" means. Two businesses in
the same SIPC class could be providing unrelated services,
and two services in wildly disperate classes could be
related.

It should also be pointed out that a disregarded entity,
such as a single member LLC or LLP, is also disregarded
for the purpose of deciding whether you have more than
one "business" requiring separate schedule C's.

--
This account is subject to a persistent MS Blaster and SWEN
attack. I think I've got the problem resolved, but, if you
E-mail me and it bounces, a second try might work. However,
please reply in newsgroup.

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The Scedule C(Form1040) refers specifically to a
"Sole Proprietorship" A husband and wife for this
definition are not considered a single unit.

The nature of your business and your spuses are are also
totally different. The schedule C requires the taxpayer to
specify the type of business and select and appropriate
business code.

The main reasin the IRS would frown on this is the
possibilty that the SE tax would not be properly
reported(and collected) If one business rins at a loss and
the other at a gain , The net of all scedusle C's wouls end
up as income or loss on joint 1040.

The SE tax for Each schedule C is computed as a separate
item and loss on one cannot offset SE Tax on another.

Note also that income from "singing" may be construed by
the IRS as a hobby, as opposed to a business, and may have
to be reported under the Hobby rules on Line21 and expenses
on SceduleA .

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"Sam" <samhunt90[at]hotmail.com> wrote:

- quote -

It would simplify matters, but it would still be incorrect.
IRS doesn't care if a business provides two or more
unrelated services, but it does care if business owners
report their income incorrectly. If you want to combine the
businesses, you need to form an entity, i.e. a partnership,
corporation, or LLC, to do so. You also need to determine
if the short-term tax savings is worth the long-term costs
and efforts of having an addition entity for which you must
do accounting and file returns.

Joel Berry, CPA
Sugar Land, Texas

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samhunt90[at]hotmail.com (Sam) wrote:
[...snip...]
- quote -

See pages 7 & 39 of Pub. 533 where it says that if you
operated more than one business as a Sole Proprietorship,
you must complete separate Schedule C's. You'll find that
the instructions to Schedule C also say the same thing. I'd
think that your situation would not meet any of the
exceptions even if there were any buried in some regulation
somewhere.

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"Sam" <samhunt90[at]hotmail.com> wrote

- quote -

As you should.

- quote -

As incorrect.

- quote -

It's not the "two or more unrelated services" it's the two
or more unrelated service providers. There's you. And then
there's your wife. Each are separate taxpayers for any
self-employed income (losses). This impacts Self-Employment
tax, retirement/IRA contributions, possibly child care
credits, etc and so on.

Keep reporting your income on one Schedule C and hers on another.

--
Paul A. Thomas, CPA
taxman at negia.net

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Sam wrote:

- quote -

As a potential indication of fraud to hide the expenses of a
"non-productive" activity (potentially, a hobby or other
"not-for-profit" venture) in a profitable one.

Separate activities - separate schedules.

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You can't combine them. Your wife has SE tax on her income;
you don't. The two incomes will combine on page 1 but
you'll need two Form SEs. As to Sec 179 deductions, your
wife's income will justify it on your Sch C just as W-2
income from either one will justify it.

Nan, EA in LA

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Sam wrote:

- quote -

Do you mean "Has anybody had the IRS question this?"

Well, actually I never have had the IRS question this, cause
the right way is still two scedule c's. You see, each
person owns a separate business. Her's is not your
business, and vice versa.

Cheer$,
Harlan Lunsford, EA in LA

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Sam wrote:
- quote -

It's VERY CLEAR that you cannot combine schedule C's for
husband and wife -- after all, the schedule SEs are
separate.

I decline comment as to whether "selling a program" and
"consulting" fall under the same business. Definately
a "facts and circumstances" question. I would say they
could be combined if they are in the same general field,
but if the program were (say) a drafting program and the
consulting were in web site design, I would tend to say
they are not the same business. If both were in
computer drafting, one could make a good case for there
being the same business.

- quote -

SOME business deductions are limited to income
FROM THAT BUSINESS.

As I pointed out, the suggestion you made would create
a misallocations of SE taxes.

If one or the other "business" is considered a hobby
under tax law, they can't be combined.

I'm sure there are other reasons.

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"Sam" <samhunt90[at]hotmail.com> wrote:

- quote -

Each of you need to file a separate Schedule C so that each
of you pay Self-employment tax which takes the place of
Social Security for a person who is an employee. This way,
you both will have benefits coming to at retirement age.

Wayne Brasch, CPA, M. S. Taxation

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samhunt90[at]hotmail.com (Sam) wrote:

- quote -

It wouldn't be a problem if they were both your businesses,
but due to SE tax, they must be on seperate Cs and 2 SEs
also.

ed

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samhunt90[at]hotmail.com (Sam) wrote:

- quote -

No can do. Each of you is running a separate business. Your
wife isn't selling software, and you aren't doing any
singing gigs.

--
D.F. Manno
dommanno[at]netscape.net

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samhunt90[at]hotmail.com (Sam) writes:

- quote -

Each of your businesses is a separate entity which provides
income to the individual. Each of you are responsible for
your own Self-Employment tax. The income provided to each
of you, in each of your separate businesses, cannot be
pooled.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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"Sam" <samhunt90[at]hotmail.com> wrote:

- quote -

As illegal.

- quote -

1) It's quite clear in the instructions that each activity
has its own Schedule C.
2) For SE tax purposes, you and your wife are not one person.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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I run a web site where I sell a program, where I thought at
one point I would make a lot of money, and I still do. It
just hasn't yet. I also report any consulting income under
the same schedule C. My wife works as a singer, and gets a
1099 form. She makes a few thousand per year. I've reported
her income on a separate schedule C up until now.

I'm thinking it might simplify matters if we just combined
our schedules C's into a single one for tax purposes. It
would make life easier for bookeeping and accounting
purposes, not to mention filling out tax forms. However,
one side effect of this is that our combined incomes would
be enough to allow me to write-off in a single year the
purchase of a new computer, which is nice but really doesn't
amount to much.

How would this "combination" be interpreted by the IRS? Why
should they care if a business provides two (or more)
unrelated services?

Thanks in advance,
Sam90

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