Should you put your spouse on your LLC?

When forming a new LLC, should you register as a Partnership and include your spouse?

First things first - if it's important to your marriage to do so, then the answer is yes.


From a financial standpoint - the answer still may be yes, but there are a few things to consider.


Registering your Limited Liability Company (LLC) as a Partnership will require an additional tax return to be filed with the IRS (Form 1065) and possibly the state. You will most likely need to hire a tax professional to file this return as it's not as straight forward as a personal income tax return. If you register your LLC as a single member entity (no spouse), the return is quite simple. You will add an additional form (Schedule C) to your personal return filed with the IRS.


There are a few instances where registering as a Partnership can save you money in taxes. For example, if you file joint returns and you or your spouse work in a high wage paying job ($132,900 in 2019) where the maximum social security tax is paid, you could save in self employment taxes. The share of profit from the Partnership that's passed to the employed spouse won't be subject to social security taxes - only medicare taxes.


Consulting with a tax expert about this subject is always a good idea. They can look at your situation as a whole and let you know the best tax strategy.


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