Splitting SE Tax from a soleproprietorship

[Lucho]

How do I split the business income and expenses from a Sch.c so husband and wife have each half of the self-employment tax?

Do I just open two Schedules C and two SE and enter the same business info on the forms?

Thank you again.

Lucho

[TAXBILLY]

From the IRS:

http://www.irs.gov/faqs/faq/0,,id=199630,00.html

taxbilly

[Pacun]

two schedules SE.

[kcjenkins]

TWO Sch C's and two SEs. But note the second requirement below, if the business is an LLC they MUST, to be correct, file a 1065 for the business, and then enter the two K-1s on the 1040. I've never understood why so many preparers look for ways to avoid that, when it is both the CORRECT WAY TO DO IT, AND THE PROFITABLE WAY FOR THEM.

From the IRS:

A married couple who jointly own and operate a trade or business may choose for each spouse to be treated as a sole proprietor by electing to file as a “qualified joint venture.” Requirements for a qualified joint venture:

• The only members in the joint venture are a husband and wife who file a joint tax return,

• The trade or business is owned and operated by the spouses as co-owners (and not in the name of a state law entity such as an LLC or LLP),

• The husband and wife must each materially participate in the trade or business, and

• Both spouses must elect qualified joint venture status on Form 1040 by dividing the items of income, gain, loss, deduction, credit and expenses in accordance with their respective interests in such venture and each spouse filing with the Form 1040 a separate Schedule C, C-EZ, or For Form 4835 accordingly, and, if required, a separate Schedule SE to pay self-employment tax.

[Lucho]

TWO Sch C's and two SEs. But note the second requirement below, if the business is an LLC they MUST, to be correct, file a 1065 for the business, and then enter the two K-1s on the 1040. I've never understood why so many preparers look for ways to avoid that, when it is both the CORRECT WAY TO DO IT, AND THE PROFITABLE WAY FOR THEM.

From the IRS:

A married couple who jointly own and operate a trade or business may choose for each spouse to be treated as a sole proprietor by electing to file as a “qualified joint venture.” Requirements for a qualified joint venture:

• The only members in the joint venture are a husband and wife who file a joint tax return,

• The trade or business is owned and operated by the spouses as co-owners (and not in the name of a state law entity such as an LLC or LLP),

• The husband and wife must each materially participate in the trade or business, and

• Both spouses must elect qualified joint venture status on Form 1040 by dividing the items of income, gain, loss, deduction, credit and expenses in accordance with their respective interests in such venture and each spouse filing with the Form 1040 a separate Schedule C, C-EZ, or For Form 4835 accordingly, and, if required, a separate Schedule SE to pay self-employment tax.

If the requirements for electing to file the business as a Qualified Joint Venture are met, how do we tell IRS of the election? Is it enough just to file with two Sch. C and two Sch. SE as the default way? Or do we have to follow a different rule?

This is my first time dealing with this issue.

Thank you again.

Lucho.