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 straightforward 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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