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Avierie
New Member

Which software do i need to use?

I am married. My husband and I file jointly. I have a full time job that provides me with a W-2, but I also have a small business. Do I need to use 2 separate softwares? Can I file jointly with my husband for my regular taxes and file by myself for my small business?

Thank you 

3 Replies
Opus 17
Level 15

Which software do i need to use?

If the business is an S-corp, a C-corp, an LLC with more than  one member, or a partnership with someone other than your spouse, then the business must file a separate business tax return, using Turbotax Business.  This is not the same as Home & Business or the Self Employed version.  Turbotax Business is only available as a CD or download to install on a PC, there is no online or Mac version.  The business tax return will create a K-1 statement for each owner or partner that is reported on their personal tax return.  This also applies if you have an unincorporated sole proprietorship and make an election to be treated for tax purposes only as an S-corp.  Note that business returns are due March 15, not April 15, and the late fee is $195 per month per partner.

 

For a sole proprietorship (either unincorporated, or single member LLC) this is treated as a disregarded entity by the IRS.  You report your business income and expenses on a Schedule C which is part of your personal tax return.  Schedule C lists the business income and expenses and determines the net profit.  That profit flows to the main 1040 where it is combined with your other income, dependents and personal deductions, to calculate your overall income tax due.  The profit from schedule C also flows to schedule SE to calculate self-employment tax (the self-employed version of social security and medicare withholding).  Your total tax bill is your income tax plus self-employment tax.  You would need Turbotax Self-Employed if filing online, or any version Deluxe or higher if using the CD or download software (the Home & Business version has the most built-in guidance, but the cheaper Deluxe version will do a schedule C if you know how to use it.)

 

Typically, you will file a joint return with your spouse that lists your regular jobs and includes a schedule C for your business.  If you insist on filing the business separately, you have two choices.  1, make the election to treat the business as an S-corp for tax purposes.  You then file a 1065 return for the business and include your K-1 on your personal tax return with your spouse.  Or 2, file your personal return with schedule C as "married filing separately" and your spouse files their return as "married filing separately" also.  But, MFS almost always results in higher taxes since many deductions and credits are reduced or disallowed for MFS taxpayers. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Critter-3
Level 15

Which software do i need to use?

Unless the business is incorporated then you only need ONE personal tax prep software. 

 

Now what you need depends on which program you will use ... you only need the Deluxe if you used the Downloaded version (Basic if you don't need a state return)  but  if you use the Online version you will need the Self Employed version to handle the Sch C.  

 

If you still need to file a 2019 return then you must use the downloaded version ...  https://turbotax.intuit.com/personal-taxes/past-years-products/

 

The "desktop" version is purchasable as a boxed CD or a downloadable installer, and is installed on your own computer.

The online version runs off Turbotax's servers and can be accessed from any web browser as well as smart phone apps.

See below for more.


Turbotax online is a different product from Turbotax Desktop (which comes as a download or CD to install on your own computer).  They have different prices and different capabilities.  The key differences are:


  1. 1. Most Turbotax desktop products include one free state module.   With turbotax online, each state is $35 extra. (With turbotax desktop, e-filing a state return is an extra fee in most states, but it is still cheaper in the end than the online product.  Or, you can avoid the fee by mailing your state return.)
  2. Turbotax desktop allows direct access to all forms and worksheets. This is good for troubleshooting, error checking, and making manual adjustments in rare cases where they are needed.  Turbotax online hides the forms and worksheets, and only allows you see them after you pay.  The worksheets and forms are never directly editable.

  3. 3. Turbotax desktop version Deluxe and higher all include schedule C for self-employment, schedule D for investments and schedule E for rentals.  The higher priced versions have more help and support, but the forms are available in the lower priced versions if you know what to look for.  With turbotax online, you must upgrade to Premier or Self-Employed to get those forms.

  4. 4. With turbotax online, each tax return requires a separate user account and password and will charge the full price.  Turbotax desktop can prepare an unlimited number of tax returns, with e-filing allowed for up to 5, all for the same initial price for the CD or download.  (Each state e-file has a separate e-filing fee, but you can avoid that if you prefer to mail your state return.)  Each return is in a separate document like having different Word or Excel documents.  This allows to you prepare test returns for tax planning, or to prepare returns for family and friends (use of Turbotax by paid preparers is a violation of the license and of IRS regulations.)

  5. 5. Turbotax online can only be purchased directly from Turbotax. Discounts are not always available and the price goes up the closer you get to April 15.  Turbotax Desktop can be purchased as a download from several discount retailers (like Staples and Amazon) and the CD can be bought from many more (including Target, Walmart, Costco, Best Buy); and usually at a significant discount compared to the Turbotax direct price.  (But avoid web sites you've never heard of, they are probably selling pirated or infected copies.)


    I only recommend Turbotax Online for people who qualify for free filing. Otherwise, the desktop version is more cost-effective and has more capabilities.
Critter-3
Level 15

Which software do i need to use?

And you will only file ONE tax return reporting all your income if the business is not incorporated ...

 

If you are new to being self employed, are not incorporated or in a partnership  and  are acting as your own bookkeeper and tax preparer you need to get educated ....  

If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-Misc for some of your income but you need to report all your income.  So you need to keep your own good records. Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf 

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf 

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

Publication 946 … Depreciation

https://www.irs.gov/pub/irs-pdf/p946.pdf

          

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Self Employed return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
http://quickbooks.intuit.com/self-employed


Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for 2017 SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.
 


PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2017  SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits. 
 
- 2. You expect your withholding and credits to be less than the smaller of: 
    90% of the tax to be shown on your current year’s tax return, or 
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year, You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

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