Multiple Non-Incorporated Businesses

If you, alone, try to sell your services or a product for profit this venture is usually considered a business (in certain circumstances the hobby-loss rules may apply).  The income and expenses of this business operation are reported to the IRS on Schedule C of your Form 1040, with you being the sole proprietor (only owner) of this business.  This is true even if you are a LLC (single member).





Many individuals attempt to sell unrelated services or products.  When the activities are not related the reporting of those activities on your tax return must be kept separate.  This means you will prepare a separate Schedule C for each business activity.  If you combine unrelated or separate business activities onto one Schedule C you may be facing negligence penalties (Rev. Rule 81-90).





If two or more people work together in the non-incorporated activity with the intent of sharing the profits, then the activity is considered a partnership and not a sole proprietorship.  In this case, the activity would report it's income and expenses on a Partnership Return, Form 1065.  The exception to this is if the partnership is between a husband and wife.  When this is the case, if both the husband and wife materially participate in the business and intend on filing a joint tax return, they may each elect not to be treated as a partnership and file their respective income and expenses regarding the business on their own Schedule C.  This exception does not apply if the husband and wife business is organized as a LLC.  If the husband and wife business has organized as an LLC they must file a partnership return. 

Tax law can change daily, please talk to your tax adviser before making decisions that will affect your taxes.