If both spouses participate in managing a sole proprietorship or single-member LLC, but only one spouse is listed as owner, can travel expenses be deducted for both spouses?
Is it possible for both spouses to jointly own a sole proprietorship or single-member LLC, or do we have to form a partnership in order to deduct those expenses? Can it only be done in a community property state?
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First, if joint ownership is desired a LLC is best and choose to be taxed as a partnership rather a corp.
Travel expenses are not itemized by individual. The tatal expens if not to lavish should not raise a red flag.
Hi there,
Two spouses can participate in a sole proprietorship. It’s called a Qualified Joint Venture. This election allows a husband and wife to to run a business without setting up a formal partnership agreement.
When filing your joint tax return, you would fill out 2 separate Schedule C’s and prorate your business expenses according to the percentage that each of you participated in the day to day operations of the business.
For example, my husband & I participated 50-50 in running our small business. We divided all of our business expenses in half and filed separate Schedule C’s in each of our names.
As for deducting travel expenses for both spouses. As long as the expense was business related, you can each take the deduction on your respective Schedule C.
I did a lot of research on this before filing our 2008 taxes. If you’re interested in more information, here is a link to an IRS article on Qualified Joint Ventures:
Good luck!
Single-member means exactly that – 1 „owner”. The other spouse needs to be a „partner” or an employee in order for you to deduct expenses for both.
You should do this anyway (either have the other spouse on the payroll or as 2nd member), because you can deduct all of the additional expenses.
Ignore the previous post. Qualified Joint Venture is EXPLICITLY not allowed if you set up an LLC.
As for you other question, why the travel? Do you travel together? Why are both of you needed?