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mvivelo
New Member

My wife & I are married and file jointly. We are also the sole members of an LLC formed in 2017. Do we need Business, Self-Employed, or both?

 
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Carl
Level 15

My wife & I are married and file jointly. We are also the sole members of an LLC formed in 2017. Do we need Business, Self-Employed, or both?

Just to clarify terminology so as not to confuse others. A business can be a sole proprietorship or single member LLC. It can't have more than one "sole" member. What you have is a multi-member LLC. For that the business needs to file it's own 1065 partnership return. To do that requires TurboTax Business (different from Home & Business). The business will issue each owner a K-1 which they will need for the personal tax returns - even if there's only two owners of the business and those two owners are filing a joint return because they are married. 
TurboTax Business is not available as an online product or for MACs. It's for the Windows platform only. Get it at https://turbotax.intuit.com/small-business-taxes/


Here's the documented facts from the IRS website at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Election-for-Husband-and-Wife-Unincor...
An unincorporated business jointly owned by a married couple is generally classified as a partnership for Federal tax purposes. For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are a husband and a wife filing a joint return, can elect not to be treated as a partnership for Federal tax purposes.
Now, the TurboTax Home and Business program can deal with this. When entering the business, you are given ownership choices of "him", "her" and "Both of Us". Upon selecting the Both of Us option and continuing, you are presented with a screen which tells you what is required.

Basically, each owner will file their own individual SCH C as a part of the joint tax return. All business income and expenses are split between the two married owners and each reports their share of each on their own individual SCH C "as if" they each are sole owner of their share of the business. The split does not have to be 50/50 either. Additionally, if you are in a community property state and chose this method, then the split "MUST" be 50/50.




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