2 unrelated people have started a music lesson business. No LLC or other bus entity. If they want to partner together, Partnership and if not, then each need to keep track of their portion of the business exps and business income. Then each will file a Sch C tax return. Sound correct?
2 Began Music lesson bus - I believe Ptnshp or Sch C
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Correct!
2 unrelated people have started a music lesson business. No LLC or other bus entity. If they want to partner together, Partnership and if not, then each need to keep track of their portion of the business exps and business income. Then each will file a Sch C tax return. Sound correct?Circular 230 Disclosure:
Don't even think about using the information in this message! -
As long as they don't advertise as a partnership, use common receipts for payments, they may otherwise share expenses and keep their own receipts for schedule c.
I reckon I'm just clarifying what Dave meant by 'singular'.ChEAr$,
Harlan Lunsford, EA n LAComment
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It sure sounds like a partnership to me. On what basis would they file as two separate Schedule Cs? It's not a joint venture. It could be an expense-sharing arrangement if they both invoice separately, advertise separately and otherwise hold themselves out to the public as separate entities.
Is only one entity registered with sales tax?
Is only one entity on a lease?Comment
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I don't think we have enough information to conclude that it's clearly a partnership, but I agree that in general, such arrangements lean towards being classified as partnerships by the IRS. They would have to take clear steps to make it anything else - the sort that I'd say should be handled by an attorney specializing in businesses and taxes. They may even be advised to form an LLC for liability purposes.Comment
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