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Bozarre tax question. Is there any incentive for my wife (business A) to pay me (business B) for labor to build something for her studio?
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My wife has a photo studio at our house and needs a wooden backdrop built. She is paying for materials from her business account, which she can deduct.

I have a new handyman business. I am going to build the backdrop for her regardless, but was wondering if there is any tax advantage, or maybe more importantly fraudulent activity if she were to pay me labor.

My thought is if business A hires business B to buold it, A gets to write off the work as expences. B has to report the earnings, but as B has more expences than earnings tgus tax year, may not have taxes to pay anyway. The money essentially changes hands within the household, but provides a tax incentive for one entity and does not require a tax burden on B. Is this worthwhile? Or should i just add it to my "honeydo" list?

Thank you!

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3 years ago