Can my taxes be dealt with separtely than my husband's? As an independant contractor, I keep my own receipts, etc., and plan to pay my taxes quarterly. Do I have to deal with my husband's income, too? I'd like to keep them completely separate. Thanks for your help and advice.
2007-06-15 18:17:15 · 7 answers · asked by gentle understanding 4 in Business & Finance ➔ Taxes ➔ United States
That would depend upon your company's structure.
If it's a sole-proprietorship, your company's income (and or losses) wind up on a typical Form 1040 on Schedule C. Unless you file "Married, filing separately" income will be "blended". Filing that way is usually not financially beneficial although it keeps things separate.
If you structure your company as an LLC (Limited Liability Company), you keep your company's liabilities and yours separate but not necessarily your income.
HOWEVER, if you structure as an LLC, and elect taxation as a corporation with the IRS, you have two completely separate financial entities.
BUT if/when you pay yourself from the company, it ends up as income reported on your Form 1040 which brings you right back to the "blended" income unless you file "Married, filing separately". This last arrangement lets you decide how much of your company's income or profit to pay to yourself or leave in the company.
2007-06-15 18:23:15 · answer #1 · answered by WindWalker10 5 · 1⤊ 0⤋
It can be kept separate if you file as married filing separately. If you file a joint return, you have to figure in his income also to make your quarterly estimated payments. Be aware that by filing separately, you will most likely end up paying more total tax between the two of you. It might be worth consulting a CPA to find out if what you'd lose in taxes is worth the aggravation it would save quarterly.
2007-06-16 03:54:33 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
You do not have to deal with your husband's income. You can file taxes separate from him, no problem. Your filing status is "married filing separately."
You must include the name and Social Security number of your spouse. Your spouse must also file "married filing separately."
If you do not have any children, and you each take the standard deduction, then you probably are paying about the same amount of taxes by filing joint or separate returns. However, if you want to itemize, or you have children, you may be paying more taxes by filing separate returns.
However, filing separate returns protects you in case your husband ends up having tax problems, has current tax problems. That is a good reason to file separately.
2007-06-15 21:37:20 · answer #3 · answered by ninasgramma 7 · 0⤊ 0⤋
There is a lot of good information here.
I would add, that you should plan your taxes along with your husbands just in case you decide to file a joint return since there are some tax benefits to filing jointly that you don't get when filing separately. If that isn't an issue then go ahead and file separately.
2007-06-16 01:46:23 · answer #4 · answered by Steve 6 · 0⤊ 0⤋
Is your business a sole propertiership, corporation, or LLC?
Married couples must file Married but they can do so by filing Married filing joint or Married filing seperate.
Talk to a tax professional and see what is before for your situation.
If you have a corporation or an LLC this is kinda moot cause you claim what the business profits on your own personal taxes.
Where as if you are a sole propertiership then you will be filing a Schedule C.
Good Luck!
2007-06-15 18:22:28 · answer #5 · answered by ~Just A Girl~ 3 · 0⤊ 0⤋
I formed a sub-S corp just so I could avoid quarterly filings.
You can also take some of the income as dividends which does not incur the 15+% self-employment tax.
2007-06-15 21:53:42 · answer #6 · answered by John 1 · 0⤊ 0⤋
you can file a Married filing seperatley tax return but you will lose all your tax credit if you have children. You should look at Irs pub 17 or the instructions to a 1040.
2007-06-15 18:20:12 · answer #7 · answered by Anonymous · 0⤊ 0⤋