How to File Jointly as a Sole Proprietor and a Part-Time Employee

[pschweim]

Hello!

I apologize if there's a subject like this already- I've tried to look here and on Google and maybe I'm just not wording things correctly or clearly enough so I figured I'd ask here just in case I'm overcomplicating things for myself.

My husband and I file jointly for our taxes. I currently have a part-time job so I have a W2 that he'll be using when he files.

I also run a sole proprietorship LLC for my freelance digital art, and I've kept track of how much I've made, and been sure to set aside 40% of each commission to account for taxes and such. I know there's the self-employment deduction which as I understand is 7.65% (or something similar) of my total income as I don't have an employer in that situation responsible for the other half of my SS/Medicaid?

The real question I have is this: I know I have to fill out a Schedule C to report income and deductions, but how do we account for the LLC income and deductions on the tax return with my having an hourly part-time job with its own W2? I know there is a place for other income (including tips) on the tax return, but would it go there, or elsewhere? Where would the self-employment deduction go on that tax return, if anywhere? Do these questions make any sense?

Feel free to explain in the most simple terms possible, because I really really do not understand tax law at all, and this has hurt my brain for a hot minute now.

Thank you!

[xmasbaby0]

It all goes on your joint tax return.  If you use online TurboTax you will need the version called Self-Employed.   If you use one of the CD/download versions, any version can be used to prepare the Schedule C you will need.

You can enter W-2 income and the self-employment income on the same tax form.  If you need help while working on it, post back here and we can help.

[pschweim]

Thank you, this helps! As my husband is the one who typically files (since he's the one who knows how), would this affect anything he does on his end in terms of the online filing when it comes to using Self-Employed TurboTax? He's not a part of the LLC and has his own salaried income that he reports as normal.

[xmasbaby0]

He will enter his own W-2 just like always under his name.  When you file a joint return there are always spots with each spouse's name on the income screens.   So when it's time to enter your self-employment income he will enter it under your name.

[greggd]

All of the earnings credit are going to me even though we file jointly as a sole proprietorship. What am I not doing right? I want half of the earnings credit to go to me and half to my wife so that we can both build up our Social Security benefits.

[VolvoGirl · Accepted solution]

Sole Proprietor means only 1 person.  If you both want to get Social Security credit for it you need to split the income and expenses on 2 Schedule C, one Schedule C for each of you.  See the answer from Vanessa here

https://ttlc.intuit.com/community/taxes/discussion/self-emplyed/00/3244728