My wife is the sole member of an LLC. I am not a member. I was told that a single member LLC is not required to file a separate business and personal return. If that is the case, how is this affected if we file a joint return? Prior to starting the LLC, we always filed our personal returns jointly. Are we still able to do this with the business portion included? I receive a W2 from my employer. Is there any benefit to filing separately vs. jointly?
Your spouse must prepare a Schedule C for the her business expenses. You can still file a joint return and n most cases that is better. You lose a lot of credits if you file separate returns.
If you use online TurboTax you need Self-Employed. If you use the CD/download you can use any version---all the forms and schedules are included with any version of desktop software so that you can prepare the Schedule C. You get more help in Home and Business if you want to upgrade.
If you were legally married at the end of 2021 your filing choices are married filing jointly or married filing separately.
Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $25,100 (+$1350 for each spouse 65 or older) You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.
If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states: AZ, CA, ID, LA, NV, NM, TX, WA, WI)
If you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.
https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately
https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states
Put more simply;
A single member LLC files a SCH C as a physical part of the personal 1040 tax return. It does not matter if the 1040 is a joint return, as only one of the joint tax filers can be identified as the sole owner of the single member LLC on the SCH C.
I'm in a similar situation. We have a farm that's a sole proprietor LLC. Do we file schedule F or C?
Your farm business activities (even as a single-member LLC) should be reported on Schedule F. To get started you can use the magnifying glass icon to search farm income, then click the Jump to link that shows in the results.