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Level 1

Can I include 1099-misc forms to others in my business income?

 I'm a Beachbody Coach. Since it is a multi-level marketing business I have signed up several of my family members to be coaches underneath me.  I put a lot of hours into my business but other people, like my mom and my husband, don't work the business.  This year I earned about $10,000, and my mom and husband also received 1099-misc forms of about 600 and 1000, respectively.  My mom said that her accountant was going to include her income on her tax return but report it as a "nominee distribution" to me.  I'm not sure what to do with my husband's income.  Can I include it with my business income?  Or does he need his own business on our tax return?


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Level 12

Can I include 1099-misc forms to others in my business income?

You can include your husband's income with yours, provided that you are filing a joint return.  The IRS does allow a certain amount of flexibility when it comes to Self-Employment involving a married couple.  For instance, where a couple is in a business together that would normally be a sole-proprietorship, a couple can make an election that their business be treated as a Qualified Joint Venture and they can split the income and expenses using a reasonable percentage distribution (50/50, 60/40, etc.)  This is pretty much the reverse.  The income ultimately taxed to you jointly, so if you were connected to the income, there is no problem including it along with your other sources of revenue and expenses on your individual Schedule C.

Your mom's accountant is treating her income correctly to transfer it back over to you.  You don't file jointly with her, so there does need to be a paper trail to claim her income on your return.  But the income reported to your husband does not need as much paperwork.

1 Reply
Level 12

Can I include 1099-misc forms to others in my business income?

You can include your husband's income with yours, provided that you are filing a joint return.  The IRS does allow a certain amount of flexibility when it comes to Self-Employment involving a married couple.  For instance, where a couple is in a business together that would normally be a sole-proprietorship, a couple can make an election that their business be treated as a Qualified Joint Venture and they can split the income and expenses using a reasonable percentage distribution (50/50, 60/40, etc.)  This is pretty much the reverse.  The income ultimately taxed to you jointly, so if you were connected to the income, there is no problem including it along with your other sources of revenue and expenses on your individual Schedule C.

Your mom's accountant is treating her income correctly to transfer it back over to you.  You don't file jointly with her, so there does need to be a paper trail to claim her income on your return.  But the income reported to your husband does not need as much paperwork.