 So do not use a Schedule C instead file form 1065 U.S. Return of Partnership Income for more information see publication 541 partnership. Now there is an exception here so if you're in that situation you might have to you could file a partnership return even though it's two spouses that own the the what would be sole proprietorship type of business which would now be designated a partnership in that situation. Here's an exception. Community Income. So if you and your spouse wholly own an unincorporated business as community property under the community property laws of a state foreign country or U.S. possession you can treat the business either as a sole proprietorship or a partnership. So states with community property laws include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. So now you've got to go down to the state law and say what does it mean to be married from the state perspective and remember that there's a differentiation from between federal law and the state law and the marriage contracts are typically you know under state law designations and whatnot so then you've got this designation of community property states or non-community property states. If you're in a community property state then then you may be able to do this a little bit more easily with spouses that own and operate a business by just by having a schedule C, C business and hopefully be able to and then again there's no big problem with the income tax really. The issue comes in with being able to allocate properly the social security taxes in a way that you can kind of maximize the social security benefits that are going to be allocated out to the two individuals in the partnership, the two spouses in this case. So a change in your reporting position will be treated as a conversion of the entity C publication 555 for more information about community property laws. So exception, qualified joint venture. So here's another type of exception, qualified joint venture. So if you and your spouse each materially participate as the only members of a jointly owned and operated business and you file a joint return for tax year you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. So making this election will allow you to avoid the complexity of form 1065 the partnership tax return a whole nother entity tax return but still give you each spouse credit for social security earnings. Now that's the key. So again that's a key that whole social security earnings things could be a big deal because of the benefits on which your retirement benefits are based. So for an explanation of quote marital participation and quote see the instructions for schedule C line G caution only businesses that are owned and operated by spouses as co-owners and not in the name of a state law entity qualified for the election. Thus a business owned and operated by spouses through an LLC does not qualify for the election of a qualified joint venture. So if you're an LLC the issue with an LLC was that normally an LLC is like a part is taxed kind of like a partnership with a separate legal entity but we thought we saw that sometimes you might have a single member LLC and if you were a single member LLC then possibly you can still file a schedule C even though you have the single member LLC which hopefully is there to give you some more liability protection perhaps. If you're if you're like two spouses you might not be able to do that single member LLC situation however you may still be able to do a normal LLC which means you'd be filing in essence like a partnership another entity type of return which would be more complex than just a schedule C situation. So to make this election you must divide all items of income gain loss deduction and credit attributable to the business between you and your spouse in accordance with with your respective interests in the venture. So if it's a 50-50 thing you'd have to split it all up or whatever the agreement is each of you must file a separate schedule C and a separate schedule SE. So that's a bit tedious obviously but it might be easier than another than having a whole nother form that partnership return. So for more information see qualified joint ventures and the instructions for schedule for for schedule SE that's going to be the self-employment tax.