My wife and I are both self-employed as freelancers and bill for our services (unrelated, separate activities) through our LLC. Since my wife and I live in a community property state (WI), this LLC is community property and -- though both my wife and I are members -- thus considered a single-member LLC and disregarded entity.
Since there is only one "business" (albeit with different activities), there is only 1 Schedule C that aggregates both my wife's and my own SE income.
However, my activity accounts for 30% of the profits, my wife's for 70%. I would thus like to file 2 Schedule SE, one for my share of SE taxes and one for my wife's share of SE taxes to be a bit more precise here. (but still have only 1, combined Schedule C).
Turbotax Home & Business does not seem to allow for that scenario (i.e. 1 Schedule C, 2 Schedule SE based on share of income). What Turbotax suggests instead is to de-facto create 2 business, one for each spouse and assign SE income accordingly. This means there are 2 Schedule Cs and 2 Schedule SEs, each with a 30/70 split in our case.
Though this is a bit clunky, of course, this would usually not matter much, especially in a community property state, but in our case it does: our individual SE income is lower than our health insurance premia, but our combined SE income is higher. So, if there is 1 Schedule C, we can deduct 100% of our health insurance premia, but if we split our income into 2 Schedule Cs, we can't deduct the premia in their entirety, since neither income is high enough.
My questions:
1) Is there a workaround within Turbotax to address this issue (i.e. to have 1 Schedule C and 2 Schedule SE instead of 2 Schedule C and 2 Schedule SE, as TT suggests)
2) If not, what alternatives do we have (e.g. assign one spouse as the LLC owner in Year 1 and the other in Year 2 - which would lead to 1 Schedule C and 1 Schedule SE in each year with one spouse paying and getting credit for all SE taxes in each year, but over time things would even out).
Thanks much!
