Splitting 1099-MISC Between Spouses in Qualified Joint Venture

[AppleCoreBaltimore]

My wife and I run our family childcare business together, and we will elect to be treated as a Qualified Joint Venture this year by filing two Schedule C's, and splitting our income/expenses between the two.

We received a 1099-MISC from our CACFP sponsor for the meal reimbursements we received. It includes my wife's name, the business name, and my wife's SSN.

Can/should we also split the amount on the 1099-MISC between our two Schedule C's, or would this cause trouble with the IRS because the 1099-MISC amount we report on her Schedule C does not match the actual 1099-MISC?

[TomCopeland]

Originally Posted by AppleCoreBaltimore

My wife and I run our family childcare business together, and we will elect to be treated as a Qualified Joint Venture this year by filing two Schedule C's, and splitting our income/expenses between the two.

We received a 1099-MISC from our CACFP sponsor for the meal reimbursements we received. It includes my wife's name, the business name, and my wife's SSN.

Can/should we also split the amount on the 1099-MISC between our two Schedule C's, or would this cause trouble with the IRS because the 1099-MISC amount we report on her Schedule C does not match the actual 1099-MISC?

Yes, you can split this. Write up an agreement between you and your wife that this income is to be divided equally between the two of you. Have your wife report all of the 1099 income on her Schedule C. Then have her report half of this amount as an expense on her Schedule C. She then reports half of the food expenses on her Schedule C. You report the other half of the 1099 income on your Schedule C and report half the food expenses.

[AppleCoreBaltimore]

Thanks Tom! This is really helpful, along with tons of good info I got from your blog.