First of all this is for a couple who work and reside in Texas, a community property state.
I'm doing a return where there is a Schedule C and Schedule F. Wife works as a traveling rep and both of them work the farm.
The previous preparer has split income (and losses) from both schedules equally between spouses. The husband has very little (if anything) to do with the Schedule C business.
I'm not comfortable with this. I discussed this with the client and they told me to file it correctly with all the income from Schedule C to her. I just want to make sure I"m not missing something here, being in a community property state and such....
The shifting of income reduces self-employment taxes and I'm sure that is why this was done in the past. ....
I'm doing a return where there is a Schedule C and Schedule F. Wife works as a traveling rep and both of them work the farm.
The previous preparer has split income (and losses) from both schedules equally between spouses. The husband has very little (if anything) to do with the Schedule C business.
I'm not comfortable with this. I discussed this with the client and they told me to file it correctly with all the income from Schedule C to her. I just want to make sure I"m not missing something here, being in a community property state and such....
The shifting of income reduces self-employment taxes and I'm sure that is why this was done in the past. ....
Comment