Wife-self employed

[Bird Legs]

working out of the home. Makes & sells items on E-bay. sales total approximately
$1500. per month. Wife is disabled and unable to drive. Husband runs errands for
her or takes her to supply stores etc. He has to take the packages to post office for
shipping, etc.
Question: can the wife reimburse the husband for mileage and claim that as an expense
on her Sched. C? Husband would, or would not have to report that as income?
As most of you can tell, my mind is not working properly these days.
Thank you.
The husband is also self employed, working outside the home.

[lsmith]

transportation expense

I would say yes.

[Gretel]

Hubby

I agree as long as hubby follows rules of reimbursment plans for employees and submits mileage log.

You could also argue that the mileage expense is actually hers and hubby funtions as a tool for her.

[jainen]

Advantage...disadvantage

The advantage in treating him as an employee is to have a medical reimbursement plan. The disadvantage is in extra bookkeeping, and moving Soc. Sec. credits from her record to his.

[Unregistered]

working out of the home. Makes & sells items on E-bay. sales total approximately
$1500. per month. Wife is disabled and unable to drive. Husband runs errands for
her or takes her to supply stores etc. He has to take the packages to post office for
shipping, etc.
Question: can the wife reimburse the husband for mileage and claim that as an expense
on her Sched. C? Husband would, or would not have to report that as income?
As most of you can tell, my mind is not working properly these days.
Thank you.
The husband is also self employed, working outside the home.

Not wanting to open that old argument about husbands and wives filing a 1065 as a partnership...

Husband runs the errands as a "courier," charges wife's sole proprietorship cost (standard mileage rate). It's O.K. that the husband isn't trying to earn a profit, as long as he follows hobby loss rules. He can't show a loss.

Husband reports the income, deducts the same, ends up with a net profit of zero, all done.

[Unregistered]

And I agree with the medical reimbursement plan. If there are any medical expenses that could be factored in here, the wife can hire the husband as an employee, and can provide medical insurance, etc., for the husband, which comes around the back side and covers the husband. At that point you'd have to set up an employer / employee relationship and simulate arm's length.

[Gretel]

Husband reports the income, deducts the same, ends up with a net profit of zero, all done.

I have to disagree with this. Income is reported on front of 1040 whereas deductions are taken on Sch. A. Depends on how Sch. A looks like if it comes out to 0.

[JON]

Making life to hard...

If all you are doing is taking a deduction for miles, standard or actual take it on her Schedule C - nothing else. If you are paying the husband extra then he has a reportable income....