Did I mess up by filing married jointly without including my spouse's LLC income?
So we're in a bit of a situation and I'm freaking out. My wife started an LLC last year and has been paying her quarterly taxes like she's supposed to. We keep all her business money completely separate from our personal accounts. When I did our taxes this year, I filed as married filing jointly but I didn't include any of her business stuff because I thought that would be a totally separate thing she would handle. Now I'm worried I messed up big time. Should her LLC income have been included in our joint return? Or was I right that it's filed separately? And if it is supposed to be separate, what filing status would she use for her business taxes? Single? I'm completely lost when it comes to this tax stuff and now I'm worried we're going to get flagged for doing it wrong. Any help would be super appreciated!
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Lukas Fitzgerald
You definitely need to include your wife's business income on your joint return. When you file married filing jointly, you're reporting ALL income from both spouses - including any business income. What your wife has been paying quarterly are estimated tax payments for her business income, but the actual reporting of the business happens on your joint return using Schedule C (Profit or Loss From Business). The LLC itself doesn't file a separate tax return unless you've elected to have it taxed as a corporation (which doesn't sound like the case here). Her business is what's called a "pass-through entity" - meaning the profits pass through to your personal tax return. The quarterly payments she's been making are just prepayments toward your joint tax liability.
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Nadia Zaldivar
•Oh no, I definitely didn't include any of that on our return. So what should we do now? File an amended return? Are we going to get in trouble with the IRS?
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Lukas Fitzgerald
•Yes, you should file an amended return (Form 1040-X) as soon as possible to include her business income. You'll need to attach Schedule C to report her business income and expenses, and Schedule SE to calculate self-employment tax. Don't panic though - people make mistakes on their taxes all the time. The IRS is generally reasonable if you correct errors voluntarily before they contact you. The sooner you file the amendment, the less likely you'll face significant penalties. The quarterly payments she's already made will be credited toward what you owe, which should help reduce any balance due.
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Ev Luca
I went through something similar last year with my husband's side business! I tried figuring it out on my own but got so confused with all the different forms. I ended up using https://taxr.ai to help sort everything out. It analyzed our situation and explained exactly how to handle the LLC income on our joint return. The tool basically confirmed what the first commenter said - my husband's LLC income had to be reported on our joint return using Schedule C. It also helped identify business deductions we were missing that saved us a bunch! The system walked me through how his quarterly estimated payments applied to our joint liability too.
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Avery Davis
•How exactly does this work? Does it like connect to IRS records or something? I'm in a similar situation but with rental income my spouse handles separately.
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Collins Angel
•Sounds interesting but I'm skeptical. How is this different from just using TurboTax or something? Does it actually check if you're filing correctly or just give generic advice?
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Ev Luca
•It doesn't connect to IRS records - you upload your documents and it uses AI to analyze them and identify the specific tax forms and schedules you need. It's much more personalized than generic advice. It's different from TurboTax because it focuses specifically on identifying filing errors and missing information rather than just walking you through form completion. It helped me understand conceptually why my husband's LLC income needed to be on our joint return and how to properly categorize his business expenses.
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Collins Angel
Update: I decided to try taxr.ai after my skeptical comment above. Honestly, it really helped clear things up! I uploaded our previous return and my husband's business docs, and it immediately flagged that we should have been including his business income on our joint return using Schedule C. It explained that the LLC is just a legal structure, not a tax structure, and since we never filed any special elections with the IRS, it defaults to being treated as a "pass-through" on our personal taxes. The system also identified some business deductions we had missed and explained how to properly account for the quarterly estimated payments on our amended return. Definitely saved us from a potential audit headache down the road. I'm actually relieved we caught this sooner rather than later!
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Marcelle Drum
Another option - if you're really stuck trying to fix this or having trouble getting through to the IRS about amending your return, try https://claimyr.com. I was in a complete panic after realizing I made a similar mistake with my joint return (forgot to include some 1099 income). I spent DAYS trying to get through to the IRS phone line with no luck. Claimyr got me connected to an actual IRS agent in about 20 minutes. The agent walked me through exactly what forms I needed to file and how to handle the amendment. You can see how it works here: https://youtu.be/_kiP6q8DX5c Before using this I was on hold for literally hours and kept getting disconnected. The IRS agent I spoke with was actually really helpful and not scary at all!
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Tate Jensen
•Wait, so this just helps you get through the phone system? How does that even work? The IRS phone lines are always jammed.
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Adaline Wong
•This sounds super sketchy. Why would I pay someone to call the IRS for me? And how do I know they're actually connecting me to a real IRS agent and not just some random person?
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Marcelle Drum
•The service navigates the IRS phone tree for you and waits on hold in your place. When an agent actually picks up, it calls your phone and connects you directly to that IRS agent. It's just solving the hold time problem. They don't call the IRS for you or pretend to be you - you're the one who speaks with the IRS agent directly. The service just handles the frustrating part of waiting on hold, which can literally take hours. It's basically like having someone wait in a physical line for you, then texting when it's your turn.
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Adaline Wong
I was totally skeptical about Claimyr (see my comment above), but after waiting on hold with the IRS for over 3 hours and getting disconnected TWICE, I gave in and tried it. I'm honestly shocked at how well it worked. Got connected to an actual IRS rep in about 25 minutes. The agent confirmed exactly what others here said - my spouse's LLC income absolutely needed to be included on our joint return. She walked me through exactly what forms we needed for the amendment (1040-X plus Schedule C and SE) and explained how the estimated tax payments would be credited. The peace of mind from talking to an actual IRS agent was worth it. They weren't judgmental at all and said this is a common mistake. Way less stressful than I expected.
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Gabriel Ruiz
Quick question - does it matter what type of LLC it is? My wife has a single-member LLC but we've been including it on our joint return. Now I'm wondering if that's correct or if we should be filing separately.
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Lukas Fitzgerald
•You're doing it correctly! A single-member LLC is disregarded for federal tax purposes by default (unless you've elected to have it taxed as a corporation). That means the business activity is reported directly on your personal tax return using Schedule C, just like a sole proprietorship. Filing jointly is often more beneficial for most couples anyway, as it typically results in a lower overall tax liability. The LLC structure provides liability protection for your wife's business, but it doesn't change how the income is taxed unless you make a specific election with the IRS.
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Misterclamation Skyblue
What about the quarterly payments the wife already made? Will those just be wasted money now?
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Peyton Clarke
•Not at all! Those quarterly estimated tax payments will be credited toward their total tax liability on the joint return. When they file the amended return, they'll include those payments on the appropriate line. The IRS keeps track of all payments made under both SSNs tied to a joint return.
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Nadia Zaldivar
•That was actually one of my biggest concerns! Thanks for asking this. I was worried her quarterly payments would just disappear into the void or something since I didn't include her business on our return. Relieved to hear we can still use those payments toward what we owe.
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Vince Eh
Just want to add - make sure you file the amendment ASAP. I made a similar mistake a few years back (forgot to include some freelance income) and waited too long to fix it. Ended up with penalties that could have been avoided if I'd acted faster. The IRS is generally more lenient if you correct mistakes voluntarily before they find them!
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