<cgilley[at]bravesw.com> wrote:

- quote -

What you're describing is the need for two Sch C's,
different SSNs for S/E tax, not a partnership.

As to amending prior year returns, it first depends on
whether the total S/E tax, H + W, was understated. If
you're over FICA max (ignoring the Medicare tax), then she
should pay S/E tax. Whether that's significant $$ is not
quite clear. You'd need to fuss with a cost accounting
exercise to reallocate expenses, even maybe home office.

S/E income on a wife can be advantageous for SS benefits, as
she gets one covered quarter for about $900 in Sch C income.
The effect it may have on future benefits is a future
earnings prediction, and even beyond that, SSA's benefit
computation would make Albert Einstein ill, and he actually
so opined as to the tax code in a year the law was much
simpler. And to the contrary, in a given situation it could
work out better if your S/E income were overstated to her
even zero detriment.

Fred F.

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I've been so busy I may need to file my first ever
extension... anyway...

In reading some information, I came across a blurb about
husbands and wives participating in a business need to file
a 1065 rather than a 1040 with Schedule C. Huh?

Many years ago, my wife started dabbling in web publishing.
She made a few thousand here and there, very low key. I'm
an engineer, and over the past 10 years I've become more and
more my own businessman, working for a variety of clients.
Last year was my first full year of consulting. For the
past N years, I've just lumped all of the income and
expenses into a joint 1040. This seemed reasonable and
logical, since my income rapidly became the major portion of
the return and it *is* a family operation of sorts.

Question 1 - do I really need to file a 1065 and then a
1040? What in God's (no disrespect intended) name for?

Question 2 - should I consider refiling past returns for the
past 2-5 years? Seems pretty silly, since we don't do
anything sophisticated at all with our business finances...

Thanks

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