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Thank you, Vanessa It has great insight and understanding.

• 1)      I will contact them tomorrow to see what they say on the correction. I am on the presumption if we are changing the social to the ein of the business it will now acts as a general pot that we can now distribute proportions accordingly, because as of now everything is being allocated to the wife.

Example: By changing it to the business ein lets the business receives a 1099k for 10k. The wife will put the 1099-k as income with the business ein at 5k usd, and I will also do the same. Put the 1099-k at 5k usd using the business ein.

At the end the IRS would see that both 5k usd from both the wife and I add up to the total sum of business at 10k usd.  

FYI: The Ein for the business is under sole member under the wifes name. When the irs instructions were followed on the ss-4 it allocated like that because Texas is a communal state.

• 2).        By fill ein I meant on work schedule C Page 1: (A,B,C,F,E) Before Part 1

A: Principal Business or profession… FILL

B: Enter Code from instructions (Naics) FILL

C: Business Name FILL

D: Employer ID Number (EIN) LEAVE BLANK is this correct?

E: Business Address FILL

Assumption: If there is no EIN under line D on schedule C then the irs would know the income reported is based on the corrected 1099-k, and as you said the only reference regarding the business ein should by inputting the 1099-k as income. At the bottom I wrote the Instructions for IRS 1040 Line D, which I believe that you are basing it as leaving blank.

• 3).      Completely understand I am not a contractor anymore because square has reclassified 1099-k and we can file as a married couple in a communal state, now we can just split all expenses, and I can now see how by splitting schedule c expenses then how to transfers over to the Schedule SE which distributes the self-employment tax.

Final Question:

• 4).      We had two 1099-Nec that we sent out before Jan-31 and that was tied in with the business EIN. This shouldn’t affect the change of the 1099-k. My question to this is if we are dividing 50% on the expenses should I also divide those two 1099-Nec that came to do work for us?

• 5).       Not sure if some guidance can be given. Most expenses that qualified for section 179 were used. There were some things that we decided to depreciate over the years on form 4562. Would that something be something that we would split in half. Or can I just give all depreciations to the wife so that in that sence there is one piece of paperwork.

I really do appreciate it. It really does help clarify a lot.

IRS instructions Schedule 1040 (line D)

Line D Enter on line D the EIN that was issued to you on Form SS-4. Do not enter your SSN on this line. Do not enter another taxpayer's EIN (for example, from any Forms 1099-MISC that you received). If you do not have an EIN, leave line D blank. You need an EIN only if you have a qualified retirement plan or are required to file employment, excise, alcohol, to- bacco, or firearms returns, or are a payer of gambling winnings. If you need an EIN, see the Instructions for Form SS-4. Single-member LLCs.

If you are the sole owner of an LLC that is not treated as a separate entity for federal income tax purposes, enter on line D the EIN that was issued to the LLC (in the LLC's legal name) for a qualified retirement plan, to file employment, excise, alco-hol, tobacco, or firearms returns, or as a payer of gambling winnings. If you do not have such an EIN, leave line D blank.

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf