You will still have to report your income either on the Schedule C, using your Social Security number as the tax ID. Strongly recommend that you at least get an EIN number from the IRS. It is free and takes about 2/3 minutes.
No penalties for not incorporating. However, an LLC gives you protection from lawsuits. They can only sue the company, not you if you are an LLC.
Yes, you can seek the protection of a Limited Liability Company (single member) and file a joint return. You would get an EIN and run the business that way. You can file your taxes for a single member LLC on the Schedule C of your form 1040 that you file with your spouse. If you decide to incorporate, you will have to do a separate tax return for the business.
Just a word of caution, please check with your state to see if there are specific rules regulations and fees for your LLC.
What if my business is more of a consulting-type structure? My income will be extremely variable, and I am not selling goods or services; therefore there are't really any 'assets' to protect. If I simply want to ensure I pay my own taxes correctly alongside my husbands W-2 earnings, is it really necessary to generate a separate business ID to work as a consultant?
Are there penalties if I don't incorporate in any way? I live in MD.
You will still have to report your income either on the Schedule C, using your Social Security number as the tax ID. Strongly recommend that you at least get an EIN number from the IRS. It is free and takes about 2/3 minutes.
No penalties for not incorporating. However, an LLC gives you protection from lawsuits. They can only sue the company, not you if you are an LLC.