“Should be remain LLC or should we opt to become a S-corp?”---->It depends on the many variables and so hard to tell, however, in my opinion, if the only partners are the husband and wife, you can elect to be a qualified joint venture and simply put all income on 2 schedule Cs and 2 schedule SEs with your 1040. The IRS recognizes that a husband-wife business is unique, so they have made an exception for this type of business, to make it easier for the husband and wife to file tax returns without having to file a complicated partnership tax return. The IRS calls this a Qualified Joint Venture. A qualified joint venture is not a business legal type. It is a concept developed by the IRS to allow husband-wife partnerships that meet certain requirements to file their business taxes as sole proprietorship, using two Sch C forms. Filing Sch C forms is cheaper than filing a partnership / S corp tax return and Schedule K-1., you do not have to file form1065/1120S ,Sch K1 of 1065/1120S Sch E of 1040.So, if you meet eligibility requirements to elect to be taxed as a qualified joint venture, there are several benefits in taking this election: Cheaper, easier to file business tax returns, and Both spouses receive Social Security/Medicare credits for business profits.Iguess you can contact a tax pro. In your local area. |