Multiple streams of self-employment income are more popular than ever, and it is common to see a mix of income sources in the same household. In this session, we’ll cover practical reporting and planning considerations for taxpayers with multiple Schedule C, Profit or Loss From Business, activities. We’ll focus on when separate Schedule C reporting is required, how to handle shared expenses and records, and how to avoid common issues tied to side gigs. We‘ll also address the factors that support a profit motive and when it makes sense to discuss entity options as part of longer-term planning.
Objectives
Upon completion of this session, you will be able to:
Determine when multiple business activities should be reported on separate Schedule Cs, versus combined reporting
Apply documentation and recordkeeping best practices for clients with multiple side gigs, including allocation of shared expenses
Identify planning opportunities and risk areas for common income streams such as consulting and platform income
Apply the hobby loss rules to evaluate profit motive and determine when an activity is more likely to be treated as a business or a hobby
Identify situations where an entity discussion is appropriate and outline next step considerations for advising the client
