Choosing which tax return to file when married taxpayers own a business

It is not uncommon for spouses to jointly own businesses. However, it is common to question how these jointly owned businesses should file tax returns. When not operating in corporate form, businesses with multiple owners must usually file as partnerships, but the filing rules for businesses owned by spouses contain several exceptions to the partnership filing rules. Although these exceptions are intended to simplify filing issues for spouses, in many cases they do just the opposite. The difficult part is knowing when the exceptions apply, how to implement them, and if they are worth the effort to elect.

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