My husband and I share eBay business. We received 1099K in his name. Can I still divide that income between us on our Schedule C's, Or Must I put it under his name?

[taxtimeagain]

Since we qualify for husband and wife joint venture, how can we split 1099 K income when it only comes in one name?  I've always just split our income in half and expenses.  This is really throwing me off...

[Patrice · Accepted solution]

The 1099-K should be entered under the person's name that matches the social security number on the form.  Since, you share the eBay business then you should put the 1099-K on 1 Schedule C and do not divide the income into 2 or more separate Schedule C's

[Carl]

Patrice, please jump in if I'm wrong. (I very well may be). If the business has it's own EIN, that EIN is tied to only one of your SSNs. The way to avoid this issue in the future so that you can split it without an issue, is to have the issuer of that K-1 issue it to the EIN and not the SSN. That will allow you to do the split then. That's because a K-1 is not specifically asked for working through the business section. If you'll note, in the "General Income" section it instructs you to enter income not reported on a 1099-MISC or 1099-G. It further instructs, "You can also use the fields below to enter income reported to you on form 1099-K"  SO with that type of a 1099-K entry, if the 1099-K has the EIN instead of the SSN on it, you can split it (I would think) no questions asked, between the two SCH C's. I would expect this would not be a problem provided both SCH C's are included with the same joint tax return.

[maryherndon54]

1099-K matching is not nearly as rigorous as 1099-MISC matching, and this question has been asked and answered a number of times with regard to 1099-MISC.  In that case, if the income on one 1099-MISC is earned partially by each spouse, then two separate 1099-MISC entry forms should be set up, each with the appropriate spouse attribution at the top of the form (the box for "Spouse's 1099-MISC" should either be checked or not).   Then below, on each (under Box 7 in most cases) indicate which Sch C to report the income on for each, and the amount to allocate.  The sum of  the two 1099-MISC entry forms should exactly equal the amount on the form received.   SO, with that said, it is not unusual for husband and wife to use the same credit card processor (or merchant bank).   This avoids doubling of fees.  Turbo Tax doesn't even ask for information from your 1099-K, it simply informs you that you should be sure and account for all of it on your return. With that said, make sure to include all income reported on 1099-K that is taxable on the appropriate spouse's Schedule C as non-1099 MISC income (some may not be taxable for various reasons, and again, the IRS is not doing an exact match as they do with 1099-MISC) .  I have not heard of anyone being audited for under-reporting 1099-K income where the bulk of the income on the form was reported and spread between both spouse's Schedule C's   The IRS is way behind in following up on 1099-K discrepancies.  There is talk that we might be seeing some automated 1099-K matching notices soon as they were dinged last year in an internal audit for not making sufficient use of this data.  Still, even if the system spits one of these out, it will be easy to respond by showing where all the income was reported, on which Schedule C.  This answer assumes you aren't trying to hide any of the income.