My wife did some side stuff selling Monat products. Kind of like a Mary Kay.. She got a 1099-NEC and I am trying to fill this out as if my wife actually had a real business.. I am confused on some of these questions. We listed her office at the home to get some additional deductions.
Background: When I purchased the house I wasn't married to my wife yet (but we lived together), and only my name was on the title and mortgage. However I refinanced last Summer, and added my wife (we got married since) to the title, but only my name is on the mortgage as the borrower. We live in Illinois if that matters as far as ownership rights without being married.
So because its my wife and she started the, "business" / sales side gig in April 2021, she wasn't on the title at that point (I refinanced in August). Would I check the box for, "'wife name' owned the home?" Next, if the box is checked it allows for mortgage interest deduction. Since we refinanced, will the software deduct the interest from the two lenders listed? Only my name is on the first and refinanced mortgages, does that matter as I am her husband for her to claim the interest paid?
Finally the, "Tell us about home expenses" part.. My wife is now a stay at home mom, and doesn't have any other source of income other than this 1099-NEC. (We're filing our taxes as married and jointly btw) I pay all the bills of course, so can she still claim Real Estate Taxes, insurance, applicable utilities etc. ? Only my name is on the 2020 property tax bill, all utility bills, and home owner's insurance. Also, I already listed property taxes within the software for general deductions and credit tax (outside of the schedule c), would I list the same amount of property taxes paid under the business home expenses => Real Estate taxes too? Do I list the utilities summed up for the year? Or for the months my wife was active for 15 days or more in the month (the software does ask how many months she as active for 15 days or more, and I put 3).
The only thing really in my wife's name to deduct was the laptop she purchased.
In this scenario would I be better off taking the simplified deduction? Sorry it's so long winded.. but I am completely confused on all of this, as I have never done a schedule C. Thanks!
