Can I Combine an Itemized LLC and Personal Standard Deduction?

[ToolsNTaxes]

Hello all. This question could save us thousands of dollars:

1. My wife and I are filing separately. She needs the standard deduction.

2. I have a simple LLC where I itemize materials and some expenses like gas.

3. I started doing my taxes today and TurboTax said if I itemize, my wife has to itemize as well.

4. I got through the Personal section of TT and realized I have zero personal deductions to itemize.

Is it possible we could both take the standard deduction AND I could still itemize some of the LLC items? I'm not sure how the IRS forms are structured. Also... if we CAN do this, I have no idea how to tell TT to do it.

Thank you.

[RichardG · Accepted solution]

Yes.  IRS regulations require married couples who file separately to be consistent in either taking itemized deductions on Schedule A or the standard deduction.  For example, the deduction for mortgage interest is on Schedule A--that's an itemized deduction.

However, your business deductions are a separate matter.  Depending on the tax election you made for the LLC, your business deductions (cost of goods, business travel, etc.) are reported either on Schedule C or on a separate tax return for your LLC.  If you are the sole owner of the LLC and did not elect corporate status for the LLC, all your business income and expenses are reported under the business tab of TurboTax Self Employed and appear on Schedule C of your personal tax return.

[ToolsNTaxes]

Thanks Richard. I understand the schedules now.

I'm going to attempt backtracking in TT to change to Standard Deduction, and assume Intuit knows it goes toward Schedule A items.

I'm a sole prop, so yes, it's Schedule C for the LLC items. I'm also assuming I'll be able to view the actual IRS return at some point later in the process, so I'll double-check placement of items.

[RichardG]

Once you finish the return and pay, you'll be able to print and review the return before filing it.

[ToolsNTaxes]

That's cool. Looks like most of my QB/TT "problems" have been due to the UIs being so brainless to use. The roadblocks have been from not being able to figure out how the hidden Intuit process works to create a final IRS form.

I'm certain there will be much clarity after I see a complete form filled out.

BTW, I did finally get myself changed to Standard Deduction. The past advice from other threads didn't work, but I just kept clicking around until I stumbled upon the correct screen.