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Great question! When you have two separate businesses, one as a sole proprietorship and the other as an LLC, you'll need to track and report the income and expenses for each business separately.
For your sole proprietorship, you'll report your income and expenses on Schedule C of your individual tax return. Each expense you write off should be directly related to this business.
For your LLC, if it's a single-member LLC and you haven't elected to be taxed as a corporation, you'll also report its income and expenses on a separate Schedule C. Again, the expenses you write off should be directly related to this business.
So, if you have expenses that are specific to one business, you should deduct them on the Schedule C for that business. If you have expenses that apply to both businesses, you'll need to allocate them between the two businesses in a reasonable way, such as by the amount of time or resources each business uses.
Remember, it's important to keep good records to show how you're dividing your expenses in case the IRS ever asks.
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