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Author: ed1007 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121426  
Subject: Combining small businesses. Date: 2/2/2009 11:24 AM
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My wife and I both have full time jobs. On the side we each do some very very small scale consulting work. On average we each bring in ~$2000/year for this. We have always filed these as two separate 1040 C -EZ forms and calculated self employment taxes separately etc. This year however, one of us actually had a net loss. Of course on the income from buisness line on the 1040 the sum of the two businesses shows up correctly. However, one of use is still paying self employment taxes.


Just for fun I redid the calculation in such a way that the loss business A had was used as a business expense on Business B. Total income and expenses for the two businesses are the same as previously just the expenses are distributed between the two differently. It reduced the SE tax by ~$150 dollars.

So now I am wondering if we should "merge" these two businesses for tax filing purposes. Can I do this? How? I think I can only use the EZ form of schedule C for sole proprietor ships not partnerships?? All the payments for the two businesses come as payments to each party independently, i.e. personal checks made out to me or my wife not a company name, if that matters.
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