Qualfied Joint Venture (QJV) with Spouse in Georgia?

[Michael16]

I've operated a sole proprietorship for several years. My spouse has been a W-2 employee but was recently laid off and has been successfully pursuing 1099 income since in the same area/industry as my business (we even share one of our clients). She's interested in establishing a solo 401k and continuing with the self-employed route.

We're discussing the pros/cons of going into business together as sole proprietors. A Qualified Joint Venture appeals to us more than the additional paperwork of payroll as a W-2 employee or having to file a 1065 as a partnership.

We live in the state of Georgia, which isn't a community property state. I assume the QJV option isn't possible for us since it requires we live in a community property state?

If we operate our own small businesses, can we decide to combine them later?

[Michael16]

Interesting. Thanks.

So let's say for sake of discussion, in the first year my 1099s total 90% of the profits and my spouse's 1099s contribute 10% of the profit to the business. According to this, we'd file our 1040 by "dividing all items of income, gain, loss, deduction, and credit between them in accordance with each spouse’s respective interest in the joint venture."

In this case, then, do we each file a separate Schedule C to our 1040 by divvying up our contributions using a 90/10 ratio?

[Michael16]

Assuming the percentages can change by year? For example, we could specify in a partnership agreement that the percentages of the business (income, expenses, etc.) are based on the individual percentages based on 1099s received? I already have an EIN. Can I continue to use this EIN and is it better for my spouse to also have an EIN or to simply use their social security number/TIN?

[Michael16]

Thanks again for this.

I already have an EIN. All of my 1099s use my EIN and this is also connected to my quarterly estimated tax filings. Would my wife also use this same EIN when filing her Schedule C or would she use her own EIN/SSN to get credit for Social Security? Would she file her estimated taxes separately from my EIN filings or would my EIN estimated payments count for both of us?

[Michael16]

What I'm trying to determine is how my spouse gets credit for taxes the business has paid into social security if we're both using the same EIN. We're a qualified joint venture, but we can also have separate EINs (so technically two sole proprietorships), correct?

I found a related thread on the TT Community (https://ttlc.intuit.com/community/taxes/discussion/my-spouse-and-i-started-a-business-that-we-are-tr...), but it's still not entirely clear to me.