Since 2007, the IRS has given husbands and wives, filing a joint tax return, the opportunity to treat their business venture like a jointly owned sole proprietorship. This election is only available to “qualified joint ventures” exclusive to husband and wife-only members provided that both parties materially participate in the trade or business and of course, file a joint tax return. (See IRS.gov Small Business/Self-Employed)
This has several advantages over treating the business as a partnership, the first of which is the reduction in paperwork and record keeping.
Taxes and record keeping requirements are less stringent.
Operating in this manner allows the principals to attend to the business and its needs first and foremost rather than worrying about keeping records that are more detailed for a partnership. A 1040 return is simple and besides that, each spouse has to fill out separate Schedule C returns according to their pre-determined ownership stakes.…






