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Old 05-15-2014, 05:38 PM
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Sole prop deductions

I have a full time job and my wife and I are starting a business. Our start up costs will be around 40K and I want to make sure I get the write off but I want the business under my wifes social. If we file a joint return and she schedules the start up costs on her schedule C as a loss will it lower our taxable income? Would it be better to use my social? We want to file as a joint venture if possible but are unsure of what is best. Any help is greatly appreciated. We are planning on using some of our 401 k for this investment and are also open to any advice on how to avoid penalties.

Thanks



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Old 05-15-2014, 08:30 PM
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Originally Posted by Cmorse View Post
I have a full time job and my wife and I are starting a business. Our start up costs will be around 40K and I want to make sure I get the write off but I want the business under my wifes social. If we file a joint return and she schedules the start up costs on her schedule C as a loss will it lower our taxable income? Would it be better to use my social? We want to file as a joint venture if possible but are unsure of what is best. Any help is greatly appreciated. We are planning on using some of our 401 k for this investment and are also open to any advice on how to avoid penalties.

Thanks
I have a full time job and my wife and I are starting a business. Our start up costs will be around 40K and I want to make sure I get the write off but I want the business under my wifes social.=======>>>>>>>it depends; You may deduct up to $5k in start-up costs in your first year in business. This deduction is restricted if you have over $50k in start-up costs. If you have additional start-up costs over the $5k, you can amortize these costs over 15 years. If you are not going to be profitable in your first year, you may want to consider another option to minimize your taxes in years where you make more profit. Instead of deducting $5k in your first year, you may amortize all start-up costs over 15 years, taking the same deduction each year. For example, if start-up costs are $51k, the deduction is reduced to $4k. If start-up costs are $55k or more, the $5k deduction is completely phased out.
If we file a joint return and she schedules the start up costs on her schedule C as a loss will it lower our taxable income?=======>>>>>>correct;her sch c net earnings are reported on your 1040.

Would it be better to use my social?=====>>>>>then she doesn’t get her soc sec benefits, self-employment tax is paid under your ssn#;you get self-employment soc sec benefits

We want to file as a joint venture if possible but are unsure of what is best.======>>>>It depends. unless you live in a community pty state and your biz is sole proprietorship, you must file your return as a partnership as yu can not file as a qualified joint venture;If you do not want to file f1065, then you may hire your spouse as an EE and issue her a W2 and you, as a sole owner, may file Sch C/SE.



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