If you live in a community property state, you can elect to have the LLC treated as a qualified joint venture. Otherwise, you will need to file a Form 1065 to report the LLC income. There will be one Schedule K-1 (Form 1065) for each of you that will carry your self-employment income to your Form 1040 and generate the self-employment tax.
Here are
the requirements to file your business tax information as a qualified joint
venture.
Partnerships
(or LLCs in community property states) with husband and wife owners can file
schedule Cs for each of their portions of the partnership’s income instead of
filing a Form 1065 partnership return by electing to be treated as a qualified
joint venture. The requirements are as follows:
- The business is unincorporated
or not organized as a limited liability company (unless the husband and
wife live in a community property state).
- The only owners of the business
are the husband and wife.
- Both spouses materially
participate in the business operations.
- Both spouses agree and elect
not to file their tax return as a partnership.
- Each spouse reports their full
share of income and expenses on separate schedule Cs.
