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My husband and I have an LLC , got 1099s with our own EIN, paid to the LLC name etc.. We live in CA and can file as a disregarded entity. How do we report this 1099-Misc?

Forum|Forum|6 years ago
June 1, 2019
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TT wants us to split income for the LLC and report equal amount for income/expenses as if our business was really 2 businesses, each owned individually. That's fine, but then the 1099 would have to show our personal info-- name, SS# or TIN, etc.

Since the money goes right to the separate business account and is not paid to us personally, the 1099 shows business name and that EIN/TIN, not our individual info.

What should we do?

TurboTax Home & Biz Windows

Best answer by SusanH

If you and your spouse own a business jointly that is reported on a Schedule C, the income and expenses have to be split. If you are filing as a disregarded entity, then the identifying number on the 1099-MISC is technically supposed to a social security number and not the business EIN. It won't matter that it is an EIN because if the IRS would ever question it, you could point them to your personal tax return.

The reason for two Schedule C's has more to do with social security and medicare than anything else. Because self-employment taxes are calculated on the net profit of the business, there is no way to split the social security and medicare taxes after the fact. So each of you will have a Schedule C with 1/2 the income and 1/2 the expenses and then you will each get credit for the appropriate amount of social security and medicare.

S

SusanHAnswer

If you and your spouse own a business jointly that is reported on a Schedule C, the income and expenses have to be split. If you are filing as a disregarded entity, then the identifying number on the 1099-MISC is technically supposed to a social security number and not the business EIN. It won't matter that it is an EIN because if the IRS would ever question it, you could point them to your personal tax return.

The reason for two Schedule C's has more to do with social security and medicare than anything else. Because self-employment taxes are calculated on the net profit of the business, there is no way to split the social security and medicare taxes after the fact. So each of you will have a Schedule C with 1/2 the income and 1/2 the expenses and then you will each get credit for the appropriate amount of social security and medicare.

C

coldpizzapunk

How does this work if your Spouse had done all the work for the first half of the year, and then you came on board for the last half of the year. Would you split 50% of just the last 6 months? Or should you still do 50% the entire year?