Established Schedule C under SSN. Creating an EIN for side work. Do I need to do a second Schedule C for that or can it all be under one?

[SyberKnight]

For 10 years I've worked as a freelancer/contractor for the same law firm & nothing else. Always used my SSN for Schedule C. Now I want to create an EIN to use for some infrequent side jobs. Do i have to create a second Schedule C for that EIN & keep using my SSN for the established long-term work -OR- can i change my current Schedule C from using my SSN to using the new EIN and roll it all in under the same Schedule C??? I don't want to mess with my long-term historical use of SSN work in fear of triggering an audit. Which would be the safest route (2 schdule c's or 1)???

[Bsch4477]

You could do either. If your new income is from essentially the same activity as your other job it might be simpler to have one Sch C. If deductions apply to one but not the other, it might be better to separate them. 

[CatinaT1]

You would do one Schedule C since you aren't changing the line of work you do. You can start reporting under the EIN now instead of under your SSN. The EIN is ultimately tied to your SSN through the EIN.

[SyberKnight]

thanks for your reply.

the new income would not be the same activity as the other/older/full-time one. just something different a little here'n'there.

[SyberKnight]

thanks for your reply!

the type of work will be different than what i normally do.

i didn't know if i replaced my SSN with the EIN if that would raise a red flag or anything.

i suppose i would also need to change the category from law work to general.

[CatinaT1]

Each different business activity is filed under its own Schedule C. You can use your EIN for the business you set it up for and continue using your SSN on the other one.

Changing from a SSN to an EIN does not raise a red flag.

[SyberKnight]

OH! so, for example,

 - the Schedule C using SSN is for legal assistance.

 - the Schedule C using EIN is for technology assistance.

i could not just combine these into 1 Schedule C then?

and to be clear, the technology assistance one is NOT much at all. maybe just a few thousand dollars for the whole year.

[CatinaT1]

Ok, earlier you said they were different activities, but it sounds like they are the same activity, just different industries. In that case, I go back to what I said first - 

One schedule C for both, reported under the EIN. No red flag by using the EIN now instead of your SSN.

[SyberKnight]

my apologies for not being super clear.

they are different activities.  the 10 year SSN schedule is for paralegal work. the new EIN work is just me dipping my toe in to doing graphics & website type stuff.

i should have been that specific from the start. so knowing that, does it change your answer?

thank you! 🙂

[Opus 17]

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@SyberKnight wrote:

OH! so, for example,

 - the Schedule C using SSN is for legal assistance.

 - the Schedule C using EIN is for technology assistance.

i could not just combine these into 1 Schedule C then?

and to be clear, the technology assistance one is NOT much at all. maybe just a few thousand dollars for the whole year.

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Different business activities need different schedule Cs.  (However, they could all be under your SSN, or one SSN and one EIN, or get a new different EIN for the second business).

The point here is, you can deduct "ordinary and necessary" expenses.  Are the expenses similar enough that "tech assistance" and "legal assistance" have the same kinds of expenses, or are they different.  

For example, if your two jobs were tutoring math, and landscaping, they would definitely need separate schedule Cs because the kind of work and the nature of the expenses are really very different.  However, if your jobs were uber, Lyft and doordash, they have very similar expenses, even though 2 are passenger services and one is general delivery, the expenses and sources of income have a lot of overlap, and it would be reasonable to combine them in my view.

Only you can determine if "legal advice" and "technology advice" have enough overlap in the character of the work and the nature of the "ordinary and necessary expenses" that you can combine them.