is this business an LLC and do you live in a community property state?
a LLC business for spouses must file a partnership return unless you live in a community property state.
if not an LLC these other rules must be met to avoid having to file a partnership return
Qualified Joint Venture
You and your spouse can elect to treat an unincorporated business as a qualified joint venture instead of a partnership if you:
• Each materially participate in the business (see Material participation, later, in the instructions for line G);
• Are the only owners of the business; and
• File a joint return for the tax year. Making the election will allow you to avoid the complexity of Form 1065, but still give each of you credit for social security earnings on which retirement benefits, disability benefits, survivor benefits, and insurance (Medicare) benefits are based. In most cases, this election will not increase the total tax owed on the joint return.
Making the election. To make this election, divide all items of income, gain, loss, deduction, and credit
attributable to the business between you and your spouse based on your respective interests in the business. Each of you must file a separate Schedule C or F. Enter your share of the applicable income, deduction, or (loss) on the appropriate lines of your separate Schedule C or F.
Each of you may also need to file a separate Schedule SE to pay self-employment tax. If the business was taxed as a partnership before you made the election, the partnership will be treated as terminating at the end of the preceding tax year. For information on how to report the termination of the partnership, see Pub. 541.
