Jump to content
ATX Community

Husband/Wife Schedule C


carolynm

Recommended Posts

I live in a community property state and have quite a few clients who file schedule c's for their husband and wife business rather than opting to be treated as a partnership.

ATX is the only program I know that has a box to tick for joint business. I know then it then allocates income to two SE schedules. Is this technically OK? Other programs make you complete two schedule C's...I just got to wondering...

Thanks

Carolyn

Link to comment
Share on other sites

>>Other programs make you complete two schedule C's<<

The election to file as a qualified joint venture always requires two Schedule C's, which can show other than a 50/50 split. However, the IRS instructions to Schedule C include an additional exception for community income, by which income and deductions are simply "allocated to the spouses." http://www.irs.gov/pub/irs-pdf/i1040sc.pdf. Professional software typically has some way to track it on a single Schedule C.

Link to comment
Share on other sites

I live in a community property state and have quite a few clients who file schedule c's for their husband and wife business rather than opting to be treated as a partnership.

ATX is the only program I know that has a box to tick for joint business. I know then it then allocates income to two SE schedules. Is this technically OK? Other programs make you complete two schedule C's...I just got to wondering...

Thanks

Carolyn

I have several of those also, Carolyn. Jainen is correct and it is acceptable by the IRS.

Link to comment
Share on other sites

Of course, if you have a single person schedule C and hire the spouse as an employee you then have the option of providing your employee with health insurance for his/her whole family on Schedule C -- instead of the SE adjustment on the front of Form 1040. Similar for a retirement plan for your employee which you will deduct on your C.

Link to comment
Share on other sites

But then you have to set up payroll and all that entails. My clients who do not have other employees opt for the splitting of the profits so both have SE contributions and both are eligible for Retirement contributions. In WI, this also makes them eligible for the Married Couple Credit which amounts to as much as $480 on the refund.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...