Getting married to someone who owns an LLC

[rlmeiller]

At the end of 2023, I'll be marrying someone who owns his own business, an LLC. I believe I can file my 2023 taxes as a single person, but what do I need to think about for the future. I make considerably more income than my future spouse, and I (not my former spouse) am the parent of record for my daughter's college financial aid.

[bkaytaxes]

Hello @rlmeiller,

Congratulations!!  

Your filling status is determined on the last day of the year.  So as of 12/31/2023 if you are married you would have the option of filing Married Filing Joint or Married Filing Separate.   In the year you are married, filing single would no longer be an option.   You can use our tool Tax Caster to see which filing status works best for both of you: TaxCaster 

Married Filing Joint is usually the most advantageous filing status but that As a married couple you will file one tax return and report all your income, including the business income or loss,  on one return if you choose to file joint. Together, you have a higher standard deductions and higher thresholds before you phase out of certain deductions.  TaxCaster can help you determine the best status before you file.   

You should check with financial aid to understand the impact on any filing or paperwork you are required to provide to them.   When you are married they may require your report both of your incomes.  

[mfields2]

If you get married before December 31, 2023 at midnight, then you won't be able to file as a single person. You will have to choose either Married Filing Jointly or Married Filing Separately.   The IRS uses your marital status at the end of the year to determine your filing status, and it applies to the whole year.  If it is a significant enough benefit to file single vs. married . . .  get married in early January.  But generally married filing jointly tax rates are preferable to filing as a single person, and if your spouse makes LESS money than you, it is likely to be advantageous to file together.  One significant exception is if your spouse is qualifying for certain income -based tax credits (like the earned income credit) that would be eliminated if you filed together.

Your new spouse owning an LLC will affect your tax return - you will have to incorporate that as a part of your overall tax return.  If your spouse files a Schedule C (as a single member LLC, this would be the default type of filing),  you will add that Schedule C to your joint tax return.  If your new spouse has elected to have their LLC file as a partnership or S-Corporation, you will have a K-1 to add to your return.  

I'm not sure your question about financial aid - if you are asking if your spouse's income will be added for financial aid purposes, the answer is yes - when you fill out the FAFSA, your tax return will reflect both income amounts.