If you are planning to start a business with your spouse, special tax options may be available to you. If you and your spouse have an equal say in the affairs of the business, provide substantially equal services to the business and contribute capital to the business, then a partnership type of relationship exists and the activity could be considered a qualified joint venture.
This is a business that is owned and operated by spouses as co-owners, and not in the name of a state law entity, such as an LLC. When you make the election to be a joint venture, you are electing to be a disregarded entity, meaning you are treated as a sole proprietor (one person versus a partnership of two people).
Because a business jointly owned and operated by a married couple is generally treated as a partnership for federal tax purposes, the spouses must comply with filing and record keeping requirements imposed on partnerships and their partners. Married co-owners failing to file properly as a partnership may have been reporting on a Schedule C in the name of one spouse, so that only one spouse received credit for social security and Medicare coverage purposes. The election permits certain married co-owners to avoid filing partnership returns provided that each spouse separately reports a share of all of the businesses' items of income, gain, loss, deduction and credit. Under the election, both spouses will receive credit for social security and Medicare coverage.
If you are self employed, the next quarterly tax payment is due September 15, 2012. Please contact us to help you to start preparing today.
This is a business that is owned and operated by spouses as co-owners, and not in the name of a state law entity, such as an LLC. When you make the election to be a joint venture, you are electing to be a disregarded entity, meaning you are treated as a sole proprietor (one person versus a partnership of two people).
Because a business jointly owned and operated by a married couple is generally treated as a partnership for federal tax purposes, the spouses must comply with filing and record keeping requirements imposed on partnerships and their partners. Married co-owners failing to file properly as a partnership may have been reporting on a Schedule C in the name of one spouse, so that only one spouse received credit for social security and Medicare coverage purposes. The election permits certain married co-owners to avoid filing partnership returns provided that each spouse separately reports a share of all of the businesses' items of income, gain, loss, deduction and credit. Under the election, both spouses will receive credit for social security and Medicare coverage.
If you are self employed, the next quarterly tax payment is due September 15, 2012. Please contact us to help you to start preparing today.
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