dealing with 2 businesses

[Lion]

Your headline about Dealing with Two Businesses mislead me. If your LLC/Sch C is getting a 1099-MISC from your mom's S-Corp, then yes your expenses to earn that income are deductions on your Sch C. Was that your question? If your question is how to track those expenses, then the answer is in the usual way you track your expenses, with a separate bank account, credit card, mileage log, etc. Just continue using your same mileage log as you use for all your Sch C mileage, noting the client, reason, date, miles, etc. Obviously, you cannot magically create business mileage out of personal mileage.

Also, be certain that you actually are an IC now that your duties have changed for your mom's S-corp. It sounds like she now has a lot of control over your activities, such as requiring you to meet her clients at her location, preparing tickets in a certain way, operating under her direction, etc. Do confirm for yourself whether you are an employee or an IC or maybe an IC for tax preparation but an employee for the S-corp's administrative duties.

[oceanlovin'ea]

The things I have to do have increased but I still do them on my own timetable. Meeting clients has to fit in my schedule. She had 2 clients come yesterday and was able to take care of them by herself (with their help). So I think I will stay an independent contractor. Maybe I'll get another raise.

Linda, EA

[Lion]

Employees get raises. ICs raise their rates and renegotiate their contracts. Make sure you have a paper trail as an IC, especially for a related party for whom you also perform personal duties. Contol is a major decider of employee vs. IC. Letting your mom control your pay rate would not be a good sign. Do your other clients unilaterally choose how much to pay you? Is your mom in a higher tax bracket than you; is she shifting her income to your lower bracket because you're her daughter? Is she trying to get assets out of her estate? Does she pay her other ICs similar rates for similar duties? Does she pay you for personal services as well as for bookkeeping (hopefully from separate checking accounts)? Does she have other workers on payroll? Does she use other ICs? With contracts similar to yours? If you were her employee, essentially she'd be paying what is now half your SE tax and could still reimburse you for business mileage under an accountable plan -- deductions for her S-Corp but no additional taxable income to you.

[oceanlovin'ea]

WOW Lion - lots of thoughts from you.

You sure bring up a lot of questions. Here is the story:

My mother, who is 92, has been selling herbs and vitamins for Nature's Sunshine Products since 1977. She has a few successful people in her downline so she gets a nice check from NSP each month. She stocks product in her home and has customers that come to get their product from her personally. She has one room devoted to her herb business. She doesn't sell as much personally as she used to but she still does pretty good each month. Some regular customers that come every month. Most of her income is not from her sales but from manager overrides. By most standards she has a small business in her home. But she does make more money than me. So she can afford to pay me whatever.
She has always done everything herself, except her bookkeeping. I have always done that. So no one else works for her. She has no other IC's that do work for her. I can just tell her I should get paid more and I will in a month or two. I am just letting her get used to the changes in her life. I would do the same for any other client. I can't kick anyone when they are down.
I know an EA in another city that is very hands on with some of his clients. I think that we should try to work with the needs of our clients whoever they are. At times they need more of our help than at other times. That is what I am doing with her.

As a side point, it is to my advantage to help her with her business as much as I can because when she dies, it will be my business. So I want a healthy business to inherit. At that point, I will keep doing the bookkeeping as I am now and hire someone to do the actual business operations probably.

Linda, EA

[taxea]

Mom has an s corporation and she sells herbs and vitamins. I have a sole proprietorship and do tax returns and bookkeeping. I don't have 2 businesses. (Although in the future when she dies, I will have 2 businesses) She hires my business as an independent contractor to do her bookkeeping and related things. So when I go to do something for her business I am going to her location just like I would go to any other clients location. It is deductible mileage.

I am just doing a lot more than I used to do so I was just trying to figure out the best way to keep track and get my mileage taken care of. I know one man in Tampa who goes to some of his clients offices 3 or 4 times a week. It is all deductible mileage for him so it should be for me too.

Not sure why a second schedule C would be needed. I would only be deducting the mileage for business related trips to her house.

Hope that clears up the mud a little bit for some of you.

Linda, EA

Linda I see no reason why you can't the income as "other" and the expenses on your existing tax prep Sch C. The accounting is a related business so a second Sch C should not be necessary.
Once the SCorp is yours you could change it to an LLC and make it a disregarded entity if you so choose.