Why it matters who owns the business

Quicken’s Tax Planner needs to know who owns each business so it can properly assign income and expenses for tax calculations. If you and your spouse both have business income, ownership affects how that income is reported and taxed.

This matters because tax rules treat business income differently depending on who earned it. Income and deductions may push one person into a different tax bracket or change how deductions apply on a joint return. Some types of business income—like self-employment earnings—can also affect individual liabilities, including Social Security and Medicare tax.

Example 1: One spouse owns a sole proprietorship

If you own a small consulting business and your spouse does not participate in the business, Quicken assigns the income and deductions to you. This affects your taxable income and self-employment tax, and determines how deductions like the home office or business mileage apply.

Example 2: Each spouse owns a separate business

If both you and your spouse own separate businesses, each set of income and expenses must be tracked and applied to the correct person. This helps ensure the Tax Planner correctly estimates quarterly payments, adjusts marginal tax rates, and applies deductions like the qualified business income (QBI) deduction.

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