dmertz
Level 15

Retirement tax questions

To elaborate on what Critter-3 said, if the LLC has not elected to be treated as a corporation (S corp or C corp), in a community property state the spouses have the option for the LLC to be treated either as a partnership or a disregarded entity:

 

https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-compan...

 

With the LLC is being treated as a disregarded entity, two Schedules C should have been filed, one for each spouse, each reporting the particular spouse's proportionate share of income and expenses.

 

https://www.irs.gov/businesses/small-businesses-self-employed/election-for-married-couples-unincorpo...

 

By filing only a single Schedule C in your husband's name, you have indicated that the LLC is owned entirely by your husband alone.

 

If the LLC establishes a SEP plan and makes contributions for a particular year, a SEP contribution for each owner must be made and the contributions must be the same percentage of net earnings (net profit minus the deductible portion of self-employment taxes) for each owner, assuming that neither is limited by the overall contribution limit.  For a self-employed individual, the maximum percentage is 20% (derived by a special calculation from the 25% base rate that would apply to W-2 employees if there were any).