Qualfied Joint Venture (QJV) with Spouse in Georgia?

Forum|Forum|1 year ago
November 21, 2024
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I've operated a sole proprietorship for several years. My spouse has been a W-2 employee but was recently laid off and has been successfully pursuing 1099 income since in the same area/industry as my business (we even share one of our clients). She's interested in establishing a solo 401k and continuing with the self-employed route.

We're discussing the pros/cons of going into business together as sole proprietors. A Qualified Joint Venture appeals to us more than the additional paperwork of payroll as a W-2 employee or having to file a 1065 as a partnership.

We live in the state of Georgia, which isn't a community property state. I assume the QJV option isn't possible for us since it requires we live in a community property state?

If we operate our own small businesses, can we decide to combine them later?

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Michael16Author

Interesting. Thanks.

So let's say for sake of discussion, in the first year my 1099s total 90% of the profits and my spouse's 1099s contribute 10% of the profit to the business. According to this, we'd file our 1040 by "dividing all items of income, gain, loss, deduction, and credit between them in accordance with each spouse’s respective interest in the joint venture."

In this case, then, do we each file a separate Schedule C to our 1040 by divvying up our contributions using a 90/10 ratio?