Hubby & Wife, both seperately self-employed...now what???

[AMH123]

HELP! Hoping someone can help and offer some advice...

My husband has been self-employed as residential contractor for two years. He has made a lot or money...but also spent a lot of money (expenses in tools and equipment). According to our taxes last year, he lost money. (However...he really didn't. I'm sure you understand.)

The wife (me) has been employed full-time and held our family health insurance. I keep our taxes kosher with a stable income paying extra to taxes to accommodate his business....until, a couple months ago. In March, I accepted a position as a self-employed contractor for a marketing firm to work from home remotely. It was a great opportunity so I took it. With this change, there were a few things I was fearful of...#1... enrolling in self-employed healthcare, but to my surprise, rates were not as bad as I expected, so that's not much of a pain point right now, BUT #2... has me worried. I have to actually invoice the marketing firm each month. They told me I would need to apply for an LLC. I haven't yet done this because I'm not sure what to do here. See, my husband has an LLC for his business. Should we just turn his business into a partnership and I go under his LLC? And if so...we are not in the same industry....does this matter? I've been trying to research for a solution, but I haven't found anything out there like our situation. I just want to choose the method that will help us the most at tax time.

If anyone has any suggestions...please let me know. Thanks so much!

[Freelancier]

Ok, a few things and they're all jumbled together.

Getting an LLC in most states is as simple as filling out a web form and paying a fee. From a tax standpoint, a single-person LLC is a non-entity, but from a liability perspective, it's good for your business if you take care to run the LLC like a business and not like an extension of you.

As for insurance, my wife and I are in the same boat, both self-employed for several years now. We actually formed a single corporation to own the main businesses and made both of us employees of the corporation (and pay ourselves salaries out of the corporation). In doing so, we qualified for group health care, which is the one place (still) that allows you to get reasonably priced insurance with pre-existing conditions. All the LLCs we own are subsidiaries of the corporation, so that's how we keep the branding different for the different activities we do.

Stuff to consider. Your best bet would be to sit down with your lawyer and your accountant and figure out the best way to structure yourselves so that you get the most protection and the most benefits.

[Harold Mansfield]

I would run them as 2 separate companies, because they are 2 separate companies. One is yours, the other is his. And file your income taxes jointly as a married couple with individual incomes just as you always have.

I should say that I'm not married nor a lawyer or an accountant and I think you need specific advice to your situation from a professional.

[AMH123]

Thanks for your replies! Much appreciated. Although, I'm trying to avoid the time and money with sitting down with a lawyer and accountant. I think I'll just file for an LLC for myself and hope for the best at tax time. If I keep researching, maybe I can find some helpful tips and tricks so tax time isn't as painful. Thanks again for your time and advice!

[Fulcrum]

Don't be scared or too cheap to get a good lawyer and accountant. They will make and save you money in the long run.