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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16575
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Is a spouse liable for tax issues related to a business if

Customer Question

Is a spouse liable for tax issues related to a business if their name is XXXXX XXXXX the business? It is a partnership, business pays no taxes. All income passes through to me so I pay the tax on my personal return which does have my wife's name on it.
Submitted: 3 years ago.
Category: Tax
Expert:  Megan C replied 3 years ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

When you are speaking about income tax liability, if you are married and file a joint return, both spouses are liable for the tax on their joint income regardless of who actually earned the income.

JACUSTOMER-4inzp554- :

The issues are on the business return, which does not have her name on it.

Megan C :

The business is a partnership, which income passes to the 1040 correct?

Megan C :

Publication 501 states the following about joint returns "Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse"

Megan C :

The business income is earned by you, and therefore taxable on your joint return. Unless you filed separately your wife would be jointly responsible for the income.

Megan C :

tax on the business profits

JACUSTOMER-4inzp554- :

Got it. she is not the partner, my father is.

Megan C :

I see. But, unless you file a separate return she would be liable for the income tax.

JACUSTOMER-4inzp554- :

ok

Megan C :

Is there anything else I can assist you with today? Publication 501 can be accessible, HERE

Megan C :

If there's nothing additional I can assist you with, please rate as "excellent" so that I may receive credit for assisting you today

Expert:  Megan C replied 3 years ago.
Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer