If you and your spouse are both members of the LLC, then it is a multi-member LLC. If you do not live in a community property state, the multi-member LLC has to be treated as a partnership for income tax purposes. The LLC has to file a partnership tax return, Form 1065. The partnership tax return will include a Schedule K-1 for each member. You have to enter information from your Schedule K-1 in your personal Form 1040 tax return.
If you do live in a community property state, you have a choice about how to treat the LLC. One option is to treat it as a partnership, as described above. The other option, if you and your spouse are the only members of the LLC and you hold your interests in the LLC as community property, is to treat the LLC as a "disregarded entity." That means that you file your tax return as if the LLC didn't exist. You and your spouse would each file a Schedule C for your respective shares of the business income and expenses.
The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
