@djlex2 wrote:
This now creates a new problem. My wife has an LLC that gets paid, and the LLC pays her via 1099 to her social security. Now that it ties her Business Income to her personal income, it has DOUBLED the gross income. That can't be right.
Your wife's LLC should not issue a 1099 to her for money she withdraws.
Background: LLCs are creations of state law, the IRS does not recognize them as different kinds of entities. To the IRS, a single member LLC is a disregarded entity, the same as an unorganized sole proprietorship. The person is the company and the company is the person, they are the same thing. The LLC can't pay the member as an employee or as a subcontractor. (Jane's LLC could pay John as a subcontractor if John did work for the business, instead of making John a partner, but Jane's LLC can't pay Jane.)
An LLC with more than one member is treated by the IRS as a partnership and must file a separate partnership return.
So you need to cancel the 1099 issued by Jane's LLC to Jane the person. The LLC and the person are the same thing.
