Saturday November 21, 2009

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Tax Tips for Married Owners
Husband-and-wife teams can get nailed on self-employment taxes. But we've got two solutions.
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Michael T. Hanley, CPA Posted: 12:00 PM On July 6, 2009
I'm not a fan of the husband-wife LLC or Partnership being taxed as a Sole Proprietorship on Schedule C. Not only does it cut one spouse out of the social security calculation, but the audit risk it way too high to justify saving the couple hundred dollars it would cost to have a separate partnership return prepared.

My solution in most cases is to setup an S Corporation that will be jointly owned by the husband and wife.

This solves the problem of overtaxation as well as the audit risk problem that some of the other solutions present.

Michael T. Hanley, CPA is the Managing Partner of the Smithtown, NY CPA Firm, Merl & Hanley, LLP and the author of Effective Tax Planning for the MicroBusiness (available at bookstores nationwide or online at www.30minutebooks.com).
Ed C Posted: 5:14 PM On April 19, 2008
How about a S-Corp? You can then reduce SE tax in a similar manner. In a S-Corp, what is considered a reasonable salary for myself if I plan to spend very little time running the day to day business since I have another full-time job?
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