Convert Sole Proprietorship to LLC in November

[SD1]

This year, my side hustle energy kicked in and I started 3 new businesses (Etsy, Airbnb & Door-to-door sales).

• Sales gig - Doing really well, I'm projecting $50k earned income by EOY.
• Etsy & Airbnb - Not too great. I plan to make investments in the next few weeks to help grow the business (e.g. Etsy - buy more product, Airbnb - Renovate bedroom and upgrade furniture).

How the businesses are paid:

• Sales gig  - paid through my LLC;
• Etsy - paid through sole proprietorship (my SSN)
• Airbnb - paid through sole proprietorship (my wife's SSN)

In 2023, I planned to convert Etsy and Airbnb to the LLC's EIN, so all 3 businesses would be under 1 EIN. I understand it's probably safer to create 3 separate LLCs for all 3 businesses, but for now this is what I plan to do.

My question: Since the sales gig is doing so well, I'd like to spend the money from that business on investments for Etsy and Airbnb. How would I go about spending funds from my LLC EIN business on my other business via my and my wife's SSN?

Can I just convert both to my LLC EIN now and use the income to fund the Etsy and Airbnb business? 

We file as Married Jointly, if that helps.

[Critter-3]

You have a lot of questions that you need to sit down with a local tax pro before you do anything to see what your state rules are on LLC filings.   Unless you incorporate or are in a partnership, getting an EIN and register with the state will mean nothing as far as your tax return goes.  All those incomes will still be reported on the Sch C or Sch E.   What you really need to do, to CYA, is have a really good insurance policy for the rental.  An LLC designation will not save you from a lawsuit.  

If you do incorporate then you must take a resonable wage and file payroll tax reports quarterly... this may not be in your best interest.  So seek local guidance on all your options. 

[SD1]

I guess my thought process was if I convert the Etsy and Airbnb business to the EIN and that legally allows me to use the earned income from the sales gig for these businesses, I can do that... and the benefit I see here is I reduce the self-employment tax.

Unless I am mistaken on when self-employment tax is collected and does not consider other business expenses associated with sole proprietorship (i.e. SSN). I assume it's collected on all earned income for your LLC. 

[Critter-3]

The ITSY is a sales business and the AIRBNB is a rental business and really should be on separate Sch C forms or a Sch C & a Sch E form depending on the situation.   PLEASE seek local professional assistance to be educated on the specifics of your individual situations.  All Sch C  income/losses are netted together before going to the Sch SE.  

[Mike9241]

a single-member LLC is a disregarded entity for tax purposes (it's taxed as if it were a sole proprietorship). . it's your money.  you can spend it as you like. the ein doesn't matter. the important things are to keep good records and get professional advice to start.  Etsy, Airbnb and the rental need to be reported on separate tax forms despite being under one LLC.  Etsy goes on schedule C. the rental goes on schedule E. the Airbnb can go on either schedule C or E depending on the facts - services you provide, length of rental and other factors. talk to the tax pro.   schedule C activities are subject to SE tax. rental activites are not. taking money from one activity to use in another is not a tax deduction for the activity from which the money came.