I have a W-2 job that pays me about $100,000 a year. In addition, I have a proprietorship that earns another $100,000 a year. My wife works more hours than I do in the proprietorship. I don’t pay her. I report all the proprietorship earnings as my income on Schedule C of my 1040. Do you see any problems with this? (H.S. Camden, NJ)
Yes. You need to establish that your wife is an employee and not a business ... Log in to view full article.