Can husband and wife who are only owners of a LLC in California file as single member LLC even though they have different shares in the ownership(%90-10%)?

[AlanT · Accepted solution]

Yes, it does not matter what the percentages are as long as:

• the LLC is wholly owned by the husband and wife as community property under state law
• no one else would be considered an owner for federal tax purposes, and
• the business is not otherwise treated as a corporation under federal law

[arapianoacademy]

so by this way 90% of the social security tax that we paid goes into credit of only one of the spouse, right?
I just don't know why turbo tax software says: The ownership percentage is the proportion of the business each of you owns. If you live in a Community Property State the ownership rules state that your ownership percentage is 50/50!

[AlanT]

Because you live in California, the state has laws stating that property acquired by a married individual is owned in common with that individual’s spouse.

[arapianoacademy]

thanks for your help! what about my first question about the social security credit? will one of us get 90% of the SS credit or the SS credit will be 50-50 since we live in California?

[AlanT]

Split 50/50 because you are a community property state.  

[arapianoacademy]

I see. even our social security credits on the w2 incomes will be 50/50 at the time of retirement?