1099 for the owner of small business?

[amdarden]

My wife owns a house cleaning company. Should we file a 1099 for her? If so, which one? The Misc? Or do we just include that as income? If both are okay, what are the advantages and disadvantages?

Thanks,

AM

[DoninGA]

How is the company organized?  Is this a sole proprietorship or a single member LLC that has Not incorporated?  Is this a Partnership or multi-member LLC?

[amdarden]

sole proprietorship. I am thinking of changing it to an LLC. Would that be helpful?

[DoninGA · Accepted solution]

No, she does not give herself a Form 1099-MISC for the income from her business.  Her net profit or loss is already reported on the Schedule C and on the Schedule 1 Line 3.

A Form 1099-MISC is given to a non-employee (not a company) who has provided a service to her business and then only if the service provided is $600 or more.

If the LLC you are considering is a single-member LLC that is not incorporated with the state, then the IRS considers this type of LLC as a disregarded entity with the income and expenses from the LLC entered on a Schedule C.

Go to this IRS website for Single Member LLC information - https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-compan...

[amdarden]

Awesome. Thanks for clearing that up. I was going to register it with the state. I am in Fla.

[Carl]

sole proprietorship. I am thinking of changing it to an LLC. Would that be helpful?

No. When it comes to taxes, the only difference between a sole proprietorship and a single member LLC is the spelling. Literally!