If the business is incorporated in any way (LLC, S- or C-corp) then the following does not apply and you need to see an accountant.

For an unincorporated partnership where the only two partners are spouses, you can treat the business as a "qualified joint venture."  Each spouse will prepare a schedule C listing their share of the business income and expenses and pay income tax and SE tax on their share of the net income.

In a community property state, you must split the income and expenses 50/50, even if the participation in the business was unequal.  

I appreciate the quick response. 

I don’t think I was clear about the business question, so I apologize.

We EACH have a separate sole proprietor business...I have one, he has one....does your answer still apply to this situation? Or is income & deductions still split in half?

i apologize for the confusion....and grateful for the help!

Is the rule the same with the business deductions?

Yes. Absolutely *everything* is split 50/50 between your individual SCH C's (assuming the business is a disregarded entity.)

You’re awesome! Thanks so much!