Note: I'm not sure about the reason for your comment re business lawyer vis-a-vis CPA, however just for clarification purposes, a CPA cannot draft an LLC operating agreement, because to do so is the unauthorized practice of law
. A CPA can advise on accounting
and tax preparation
. A lawyer can advise on contracts/agreements/law and tax preparation. But, a CPA cannot adivse on legal matters, including contracts/agreements, and a lawyer cannot advise on accounting practices.
Okay, where were we...?
First, an LLC owner is not an employee of the LLC, unless the LLC expressly hires an owner as an employee of the LLC. Otherwise, LLC profits generally pass through to each owner in proportion to their respective investment in the LLC, and are reported to each owner on a Partnership
Profits/Losses may be either ordinary income
or passive, dependent
upon material participation rules
(500 hours personal
services for the LLC during the tax year). If participation is passive, then LLC losses cannot offset ordinary income -- which includes W-2 wages/salaries.
Where community property is involved, LLC profits/losses affect each spouse's share of the community estate jointly. Spouses can avoid this outcome only by filing
their tax returns
Under your alleged facts, since you are not material participants in the business, it makes no difference how you report the LLC losses, because those losses cannot offset W-2 wages/salaries. So, the only question is whether or not there are other issues that may argue in favor of filing taxes as married-separate. The only thing, frankly, that comes to mind, would be if one spouse believes that the other may not be properly reporting
taxes, so that the risk of being involved in some sort of tax fraud conspiracy is mitigated. Other than that, I see no reason not to file tax returns jointly.
If you have some specific concern, feel free to clarify.
Hope this helps.
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