OK, I'll try to keep this simple. I'm in the process of buying a related business.
For years, I've had my sole proprietorship (signing for caretakers/parents of babies and hearing children). Last year, I was hired to help manage a related business that I often teach through (birth/breastfeeding/baby/parenting classes). Now I'm going to buy it with a partner and don't know how to combine the two, tax-wise, or if I should. It would be simpler to only have to deal with one, but....
1. I need to keep the identity of the old business because while I do a LOT through the new business, I also have an audience in the education market and need to keep that presence.
2. When I get income separate from the new business, how do I NOT put that in the pot with the other co-owner and keep it as mine?
Could I somehow make business1 a subsidiary or branch of business2 and just agree with my partner that I'll take that income when we divy up the month's earnings? And have it all under one license? Does that hurt her in any way?
Should I just keep them separate? I worry that will drop my earnings from business1 too much and classify me as a 'hobby' with the IRS after awhile?
Any thoughts? Hope that made sense!
For years, I've had my sole proprietorship (signing for caretakers/parents of babies and hearing children). Last year, I was hired to help manage a related business that I often teach through (birth/breastfeeding/baby/parenting classes). Now I'm going to buy it with a partner and don't know how to combine the two, tax-wise, or if I should. It would be simpler to only have to deal with one, but....
1. I need to keep the identity of the old business because while I do a LOT through the new business, I also have an audience in the education market and need to keep that presence.
2. When I get income separate from the new business, how do I NOT put that in the pot with the other co-owner and keep it as mine?
Could I somehow make business1 a subsidiary or branch of business2 and just agree with my partner that I'll take that income when we divy up the month's earnings? And have it all under one license? Does that hurt her in any way?
Should I just keep them separate? I worry that will drop my earnings from business1 too much and classify me as a 'hobby' with the IRS after awhile?
Any thoughts? Hope that made sense!
