We are filing as a QJV in a community property state. We have many 1099-misc. To show the same income for both of us, exactly how/where do I report/split it properly.

I have seen this topic asked several times, but never truly answered effectively. My husband and I are filing as a qualified joint venture in a community property state. We have several small 1099-misc and one very large 1099-misc. The small ones are under my spouses SS# and the large one is under mine. I want to split and show the same income for both of us, but I don't know exactly how/where to report the income and split it properly. Can someone give me specifics.

I've been told so many different things. I don't know if I should

1) Disregard the 1099's and report as General Income

2) Enter the 1099-misc on both schedule Cs with 1/2 the amount for each

3) Enter the large 1099-misc on mine and then deduct the appropriate amount to create half and enter that on his (if so, where do I deduct it out, and where do I enter it on his?)

The concern I have with # 3 is that it might look like we are getting more money in than we really are. We have to be very careful not to look like we are bringing in more money an then just expensing out, because we are filing for College Financial Aid and other benefits also. Some benefits programs add certain Schedule C expenses back in when they calculate assistance.

2529

New Member

Jun 3, 2019 1:29:46 PM

With Qualified Joint Ventures in community property states, you will report 50% of all the income and expenses. Basically, both of your schedule Cs should look the same with half of the total income and expenses on each.

Enter the total of both of your Forms 1099-MISC and divide the total between and enter that amount as General Income on both of your Schedule Cs.

Level 2

Jun 3, 2019 1:29:48 PM

What if it is NOT a community property state? Should we do the same? I also am confused by seeing the 3 options TheBougs listed.

Level 15

Jun 3, 2019 1:29:49 PM

Here's some IRS info on Husband & Wife joint venture
<a rel="nofollow" target="_blank" href="http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Election-for-Husband-and-Wife-Unincorporated-Businesses">http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Election-for-Husband-and-Wife-Unincorporated-Businesses</a>

Level 15

Jun 3, 2019 1:29:50 PM

I meant to post this one too. This one is better
<a rel="nofollow" target="_blank" href="https://www.irs.gov/businesses/small-businesses-self-employed/married-couples-in-business">https://www.irs.gov/businesses/small-businesses-self-employed/married-couples-in-business</a>

Level 2

Jun 3, 2019 1:29:51 PM

Thanks! Good information. It doesn't mention HOW you should split it 50/50 though. I am not sure if I should try to get clients to write two 1099's - half to each of us, which sounds ridiculous. So the other options seem to be one of the three TheBougs mentioned and I don't know which to do. Or should I just try to get some clients to list one SSN on their 1099 and some the other spouse's SSN and get it as close to even as I can? Although that sounds unorganized and confusing.

Level 9

Jun 3, 2019 1:29:52 PM

I usually use method #3. Report the the larger 1099 income on one Schedule C (report it as General Income), then as an "Other Deduction" (I label it as "QJV: Allocated to Spouse"), enter the adjustment amount. On the other Schedule C, report 50% of the income.

For example, let's say there is a total of $50,000 of Gross Business Income, and there are $30,000 of 1099s in one spouse's name. For that spouse, I would report $30,000 of income, then a deduction/adjustment of $5000 (plus 50% of all of the 'real' deductions). For the other spouse, I would report $25,000 of income (and 50% of all of the 'real' deductions).

Level 2

Jun 3, 2019 1:29:54 PM

Thank you! Does that cause your income to look like you earned an extra $5,000 though?

Level 9

Jun 3, 2019 1:29:55 PM

Sort of, but not really. If you enter $30,000 and subtract $5000 as a deduction, it 'nets' $25,000. With the POSSIBLE exception of depreciation and home office expenses, the only thing anybody looks at is the 'net', which would be $25,000.

Level 2

Jun 3, 2019 1:29:56 PM

That makes sense. Thanks!

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We are filing as a QJV in a community property state. We have many 1099-misc. To show the same income for both of us, exactly how/where do I report/split it properly.