Whose Name is on Your Schedule C?
If you are married, it can make a big difference whose name is on your tax return.
A provider recently discovered that her tax preparer had listed her husband's name on her tax forms (Schedule C Profit or Loss from Business and Schedule SE Self Employment Tax) for the past six years.
When she got divorced, she realized because her husband's name and Social Security number were on her business tax forms that he, not she, was getting Social Security credits that belonged to her!
Your Social Security benefits are based on the highest 35 years of earnings over your lifetime. You want to be sure that you receive the Social Security benefits you are entitled to. Therefore, you should go to www.socialsecurity.gov and look up your statement of benefits to see if your income over the years is being properly credited under your name.
Your Social Security statement will show how much you earned each year of your life. If there are zeros for some years when you did work, it's possible that your husband is getting credit because his name was on your Schedule C or Schedule SE.
If you discover that your husband's name was entered inadvertently, you can contact the Social Security office and get this fixed.
Therefore - be sure to put your name and your EIN number (if you have one) on your Schedule C and Schedule SE. On all other federal tax forms, enter your Social Security number.
In addition, if you are filing quarterly estimated taxes using IRS Form 1040ES Estimated Tax, be sure your name is on this form as well.
If you remain happily married (or at least married) by the time you and your husband retire and receive Social Security benefits, your benefits will be lower if your husband's name, instead of yours, was on these tax forms. His benefits will be higher. That may or may not make a difference, depending on your circumstances. However, you should contact the Social Security office to discover the consequences of having you or your husband's name on these forms.
When might you want your husband's name on a Schedule C?
Some providers work alongside their husband doing child care. If so, you have the option of splitting your income and expenses and filing two Schedule C's, and two Schedule SE's. This only makes sense if you want your husband to show some earnings to either qualify for Social Security benefits and/or to receive higher benefits.
There are several considerations you should examine closely before taking this step.
Conclusion: Before filing your taxes, check to see that your name is on Schedule C and Schedule SE and Form 1040ES!
Tom Copeland - www.tomcopelandblog.com
Image credit: https://www.hrblock.com/tax-center/irs/forms/what-is-a-schedule-c-tax-form/
