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jnc3525
New Member

My wife and I own a business together. The question says 'who did this work or owned this business?' It only allows me to select me or my wife. I need to select both?

How do i proceed with this?
1 Best answer

Accepted Solutions
Opus 17
Level 15

My wife and I own a business together. The question says 'who did this work or owned this business?' It only allows me to select me or my wife. I need to select both?

If this is an unincorporated partnership and the only two people involved are you and your spouse, then you treat it as if each of you has a business and you report a share of the income and expenses based on each spouse’s share in participation in the business activities.  Enter a business for one spouse, enter the expenses and income, then add a second business to the tax return in the name of the other spouse and add the other share of the expenses and income.  (if you live in a community property state, it is mandatory that you divide income and expenses 50/50, even if the participation is not 50/50.)

 

Alternatively, you can enter the entire business income and expenses in the name of one spouse, but include the other spouse as a subcontractor and pay them some cash and issue a 1099-MISC. Then the second spouse will create a separate business as a subcontractor, and report their cash income without any expenses.

 

If the business is an LLC or some kind of corporation, or if it is an unincorporated partnership with an additional partner who is not one of the spouses, then the business needs to prepare a separate tax return before the partners can prepare their personal tax returns.  The business tax return will create a K-1 statement for each partner which the partner uses to prepare their personal return.  Business returns can only be prepared with the TurboTax Business version, which is only available as a download or CD to install on your own PC. There is no Mac or online version.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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1 Reply
Opus 17
Level 15

My wife and I own a business together. The question says 'who did this work or owned this business?' It only allows me to select me or my wife. I need to select both?

If this is an unincorporated partnership and the only two people involved are you and your spouse, then you treat it as if each of you has a business and you report a share of the income and expenses based on each spouse’s share in participation in the business activities.  Enter a business for one spouse, enter the expenses and income, then add a second business to the tax return in the name of the other spouse and add the other share of the expenses and income.  (if you live in a community property state, it is mandatory that you divide income and expenses 50/50, even if the participation is not 50/50.)

 

Alternatively, you can enter the entire business income and expenses in the name of one spouse, but include the other spouse as a subcontractor and pay them some cash and issue a 1099-MISC. Then the second spouse will create a separate business as a subcontractor, and report their cash income without any expenses.

 

If the business is an LLC or some kind of corporation, or if it is an unincorporated partnership with an additional partner who is not one of the spouses, then the business needs to prepare a separate tax return before the partners can prepare their personal tax returns.  The business tax return will create a K-1 statement for each partner which the partner uses to prepare their personal return.  Business returns can only be prepared with the TurboTax Business version, which is only available as a download or CD to install on your own PC. There is no Mac or online version.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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