If what you have is a single member LLC or sole proprietorship, just make your spouse a W-2 employee. Otherwise, if you make her an owner then you no longer have a sole proprietorship or single member LLC. You have a multi-member LLC or Partnership which must file it's own physically separate 1065 tax return with the IRS. Just make her a W-2 employee and save yourself a "LOT" of hassle and paperwork.
