Reporting Husband and Wife Schedule C for disregarded entity

[barbieranch]

My husband and I live in a community property state (Louisiana). We operate a 50/50 business according to our LLC Operating Agreement. We have elected to treat the business as a disregarded entity. We both materially participate in the business; however, he always puts in more time than I.  What is the correct way to file Schedule C? The first 2 years of operating the business were filed under his name. The last 2 years were filed under my name. I would like to begin filing 2 Schedule C and SE, one for each of us and file this way from now on. Should I amend the prior years, or just move forward by splitting the earnings?

[SusanY1]

Ideally, you should amend the returns to show 50/50 for all of the years where you were operating the business under this agreement to show two Schedule Cs.  The reason for amending, as well as treating it this way going forward, is that you want to each have half of the self-employment earnings on your individual Social Security records for proper calculation of your benefits.  It won't change the tax due, but it should shift the credits to the proper Social Security accounts.