Employee and SE spouses filing joint -What is the best route?

[mrs110616]

My spouse is SE and made 10K. I am an employee and made 70K. can we file a regular joint return? What form do we use? Should he be paying taxes throughout the year? 

If he does not pay taxes throughout the year, but will be filing with me and I did pay taxes, is that ok? We have 3 dependents as well. We also bought a home this year- in my name. Wanting to know

1) Form we need to use to get the most out of our return

2)As SE, should he be paying taxes throughout the year, he usually makes 9-10K throughout the year

3) Should we file separate or joint? 

[TomD8 · Accepted solution]

You can file a joint return.  Your spouse would report his business income and expenses on Schedule C, which will be part of your joint return.  Yes, he should be making quarterly estimated tax payments both to the IRS and to your state, assuming your state has an income tax, since no taxes are being withheld from his income.  In order to deduct his business expenses, you'll need to use the self-employed version of TurboTax Online, or the Home & Business version if you use TT CD/Download.

[mrs110616]

Thank you for help. He cannot deduct his business expenses and we use the standard deductions as well right? Last year, we filed joint and used the standard because his business expenses were not over the 12K deduction we were given w/ standard. Am I correct in that we have to do one or the other? also, if we do the itemized way, doesn't that mean I would have to itemize all of our expenses as well? Lastly, if we don't itemize, and use the standard deduction, would we still use the self-employed version of Turbotax online or ht home & business version? Could we use standard software if we go w/ standard deduction.

[TomD8]

His business expenses are deducted from his business income on Schedule C.  They are not an itemized deduction on Schedule A.  Those are two separate things.  You can deduct business expenses on Schedule C AND still itemize your non-business deductible expenses on Schedule A, or use your standard deduction,  whichever provides the most benefit for you.  Once you've entered all your numbers into TurboTax, the program will tell you which of those two options is best.  To deduct business expenses, you need either TT Self-employed online OR TT Home & Business CD/Download.
It's not as complicated as it sounds; your spouse just has to get used to keeping track of his SE income and expenses.  The TurboTax program will walk you through Schedule C when you do your return.

[mrs110616]

ok great, thanks so much! we used credit karma last year and we only went with the standard deduction i believe.  I am now reading on all kinds of deductions we could have used- part of phone bill, home office part of lights, etc. thanks for your help on this.