AnonymousFamilyBusiness
New Member

Trouble Splitting Married Business Income due to 1099-MISC

My wife and I own a side therapy business that generates income two separate ways: Seeing clients under our own company name and also seeing clients as a contractor under another person's larger, more established business. We have an LLC and we know that is a disregarded entity as we are wholly owned by the two of us.

 

TurboTax is telling us on our Schedule C we should split the profits and losses 50/50 and make two separate businesses. (Community Property State) But, a majority of our income is from a 1099-MISC and we can't split that in two. 

 

If I don't claim the 1099-MISC, I can happily split the profits and losses 50/50 where it all works out in the end. But then I'm not claiming a 1099-MISC, which the IRS is looking for me to claim it. How do I tell the IRS-'Hey we are owning up to our 1099-MISC income without attaching the 1099-MISC? It can't be cut into two.' I know that not claiming a 1099-MISC is a red flag for audits, and I just don't want to wait until the auditor shows up, ruins our lives for a few months as we show the 1099-MISC was split in two under the business's profits.

 

Thanks