Yes, a husband and wife can be partners in an LLC. In fact, it is one of the most common business structures used by married couples in the United States. Under IRS Revenue Procedure 2002-69, spouses who co-own an LLC have multiple options for how the business is classified and taxed at the federal level — but the options available depend on whether the LLC is formed in a community property state or a common law property state.
According to the U.S. Census Bureau’s 2022 Annual Business Survey, approximately 297,778 employer firms are jointly owned and operated by spouses, representing over 10% of all U.S. for-profit businesses. Despite how common spousal LLCs are, many couples make avoidable mistakes during formation and tax filing that lead to IRS penalties, lost liability protection, and unnecessary self-employment taxes.
Here is what you will learn in this article:
- 🏛️ How federal tax law treats a husband-and-wife LLC, including the Qualified Joint Venture election and partnership default rules
- 📋 The specific formation steps, operating agreement provisions, and state filing requirements every spousal LLC needs
- 💰 Self-employment tax strategies that can save spousal LLC owners thousands of dollars each year
- ⚖️ How divorce, estate planning, and asset protection interact with spousal LLC ownership
- 🚫 The most common mistakes married couples make with their LLCs — and how to avoid the negative consequences of each
How Federal Law Classifies a Husband-and-Wife LLC
The IRS does not have a special “spousal LLC” category. Instead, it classifies every LLC based on the number of owners and the entity classification rules under 26 CFR 301.7701-2. When two spouses co-own an LLC, the IRS generally treats that business as a multi-member LLC taxed as a partnership. This means the LLC must file Form 1065 (U.S. Return of Partnership Income), issue separate Schedules K-1 to each spouse, and comply with all partnership record-keeping requirements.
However, there is an important exception. If the spousal LLC is formed in one of the nine community property states, the couple may elect to have the LLC treated as a disregarded entity — essentially a sole proprietorship for tax purposes. This option exists because, under community property law, both spouses are considered equal owners of all marital assets by default. The IRS formalized this treatment in Revenue Procedure 2002-69, and Congress expanded it further through the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28).
In a non-community property state (also called a “common law” state), a husband-and-wife LLC cannot be treated as a disregarded entity. It must either be taxed as a partnership or elect corporate taxation (S-Corp or C-Corp) by filing Form 8832 or Form 2553 with the IRS. There is no workaround for this distinction — it is baked into the federal tax code.
The Nine Community Property States
The distinction between community property and common law states is critical for spousal LLCs. The nine community property states are:
| Community Property State | Common Law State (Examples) |
|---|---|
| Arizona | Florida |
| California | New York |
| Idaho | Ohio |
| Louisiana | Pennsylvania |
| Nevada | Illinois |
| New Mexico | Georgia |
| Texas | Michigan |
| Washington | North Carolina |
| Wisconsin | All remaining 32 states |
If your LLC is formed in one of the nine states listed on the left, you and your spouse can elect Qualified Joint Venture (QJV) status or disregarded entity treatment. If your LLC is formed in any of the other 41 common law states, the LLC must file as a partnership or elect corporate tax treatment.
It is worth noting that the community property designation only applies to assets acquired during the marriage. If one spouse formed an LLC six months before the wedding, the LLC is not automatically community property. If the LLC is formed after the wedding, it is. This timing detail can affect both tax classification and divorce outcomes.
Qualified Joint Venture: Requirements and How It Works
A Qualified Joint Venture is a special IRS election that allows a husband-and-wife LLC in a community property state to avoid partnership tax filing. Instead of filing Form 1065, each spouse files a separate Schedule C (Profit or Loss From Business) on their joint Form 1040. This simplifies tax preparation, reduces accounting fees, and gives both spouses credit for Social Security and Medicare coverage purposes.
To qualify, the LLC must meet all of the following requirements under Revenue Procedure 2002-69:
- The LLC is formed in a community property state
- The married couple are the only LLC owners (no other persons or companies)
- Both spouses materially participate in and operate the business
- The married couple files a joint federal income tax return (Form 1040)
- The LLC has not elected to be taxed as a corporation
If even one of these requirements is not met, the QJV election is unavailable. For example, if the couple adds a third member — such as a child or an investor — the LLC no longer qualifies. If only one spouse works in the business while the other is purely passive, the material participation requirement under Section 469(h) is not met. The IRS defines material participation as regular, continuous, and substantial involvement — occasional help does not count.
Making the Election
The QJV election is made directly on the couple’s joint Form 1040 by filing separate Schedule C forms. There is no separate election form to submit. When obtaining an EIN from the IRS, the couple selects “single-member LLC” on the IRS EIN online application. The confirmation letter will show only one spouse’s name with the abbreviation “SOLE MBR” — but this does not mean only one spouse owns the LLC. It simply reflects the disregarded entity classification.
Income, gain, loss, deduction, and credit items must be split between the spouses according to each spouse’s interest in the joint venture. For most couples, this is a 50/50 split. Each spouse also files a separate Schedule SE to calculate their individual self-employment tax obligation.
Switching from Partnership to QJV
If you already have a husband-and-wife LLC that has been filing as a partnership, you can switch to QJV status by mailing a notification letter to the IRS. Wait 30 to 45 days for a confirmation letter. The old partnership EIN must stay with the partnership; if you need a new EIN for the sole proprietorship, apply separately. Be aware that if a married couple files a partnership return, they cannot later claim it was not a partnership to avoid late-filing penalties.
Partnership Taxation for Spousal LLCs
If your spousal LLC is in a common law state — or if you choose partnership treatment in a community property state — the LLC is taxed as a partnership by default. This means the LLC files Form 1065 (Partnership Return), which is an informational return. The LLC itself does not pay income tax. Instead, it issues a Schedule K-1 to each spouse showing their share of profits, losses, deductions, and credits.
Each spouse then reports their K-1 amounts on their personal tax return. Both spouses must also file a separate Schedule SE to calculate self-employment tax on their respective shares of income. This is where the tax bills can add up fast — and where many couples discover they are paying far more than necessary.
The Self-Employment Tax Problem
Under partnership taxation, both spouses owe self-employment (SE) tax on their share of net SE income. For 2025, the maximum 15.3% SE tax rate applies to the first $176,100 of each spouse’s net SE income. That 15.3% includes 12.4% for Social Security and 2.9% for Medicare. Above the Social Security ceiling, the Medicare component continues at 2.9%, increasing to 3.8% once the couple’s combined SE income exceeds $250,000.
Here is what this looks like in practice:
| Scenario | Tax Treatment | Combined SE Tax |
|---|---|---|
| 50/50 partnership, $250,000 net income | Each spouse: $125,000 × 15.3% | $38,250 |
| Sole proprietorship (one spouse), $250,000 net income | One spouse: $176,100 × 15.3% + $73,900 × 2.9% | ~$29,086 |
| S-Corp, $120,000 total salary | Each spouse: $60,000 × 15.3% | $18,360 |
The difference between the partnership treatment and the S-Corp strategy in this example is nearly $20,000 per year in self-employment tax savings. This is not a one-time benefit — it repeats every year the business remains profitable.
Three Self-Employment Tax Reduction Strategies
Husband-and-wife businesses have three primary strategies for reducing their combined SE tax burden. Each strategy fits a different situation.
Strategy 1: Elect QJV / Sole Proprietorship (Community Property States Only)
Under Revenue Procedure 2002-69, couples in community property states can treat their LLC as a sole proprietorship operated by one spouse. Only that spouse owes SE tax. The other spouse’s share of income is not subject to SE tax because the business is treated as one economic unit. This single change can save $10,000 or more per year on a profitable $250,000 business.
Strategy 2: Convert to an S Corporation
Any spousal LLC — in any state — can elect to be taxed as an S Corporation by filing Form 2553 with the IRS. As S-Corp shareholder-employees, both spouses pay themselves “reasonable” salaries subject to FICA taxes. The remaining profits are distributed as FICA-tax-free distributions. The key is paying modest but defensible salaries while distributing most of the cash flow tax-free from a payroll-tax perspective.
However, S-Corp election triggers new requirements: filing Form 1120S, running payroll, and complying with the IRS’s reasonable compensation standard. If salaries are set too low, the IRS can recharacterize distributions as wages and assess back taxes, interest, and penalties. One additional caution: paying too-low salaries also limits the maximum allowable retirement plan contributions to 25% of salary under a SEP or profit-sharing plan. Setting up a 401(k) plan can offset this concern.
Strategy 3: Disband Partnership, Hire Spouse as Employee
Couples in common law states who do not want S-Corp complexity can disband the partnership and run the business as a sole proprietorship (or SMLLC) operated by one spouse. The other spouse is hired as an employee with a modest salary. This limits the SE tax to just one spouse’s income and allows the employer-spouse to set up a Section 105 medical expense reimbursement plan — deducting family health insurance premiums and out-of-pocket medical costs as a business expense, free of income and FICA tax.
The Operating Agreement: Why It Is Essential
Every husband-and-wife LLC needs a comprehensive operating agreement — even if the state does not legally require one. The operating agreement is the internal governing document that defines ownership percentages, management roles, profit distribution, and what happens during a dispute, divorce, or death.
Without an operating agreement, the LLC defaults to state law, which may not reflect the couple’s intentions. For example, many states assume equal ownership and equal management authority unless a written agreement says otherwise. This can create chaos during a disagreement or when one spouse wants to exit the business.
Key Provisions for a Spousal Operating Agreement
- Ownership percentages: Most spousal LLCs split ownership 50/50, but couples can choose any split (e.g., 70/30) based on contributions or involvement.
- Management structure: Decide between member-managed (both spouses run daily operations) or manager-managed (one spouse handles management while the other is passive).
- Profit and loss allocation: Profits should match ownership percentages unless the agreement states otherwise.
- Dispute resolution: Include a mediation or arbitration clause. Without one, disputes may end up in court, costing thousands in legal fees.
- Divorce provisions: Specify what happens to the LLC if the couple divorces — including buyout terms, valuation methods, and transfer restrictions.
- Death or incapacity: Include provisions for what happens if one spouse dies or becomes incapacitated, including whether the survivor inherits the membership interest automatically or the interest passes through the estate.
- Buy-sell provisions: A mandatory buy/sell clause addresses deadlocks. One owner makes a buyout offer; the other must either accept the offer or buy the first owner’s interest on the same terms. This mechanism encourages fair pricing and gives both parties a clear exit.
Three Real-World Scenarios
Scenario 1: Couple Launches a Consulting LLC in Texas
Maria and Carlos live in Texas (a community property state) and start a marketing consulting LLC together. Both work full-time in the business. They elect QJV status.
| Decision | Result |
|---|---|
| Formed LLC in a community property state | Eligible for Qualified Joint Venture election |
| Both spouses materially participate | Meets IRS material participation requirement |
| Filed joint Form 1040 with two Schedule C forms | No Form 1065 partnership return needed |
| Only Carlos’s Schedule SE reflects full business income | Combined SE tax reduced by approximately $12,000/year |
Because Texas is a community property state and both spouses are active, they avoid the complexity of partnership returns and save thousands in SE tax annually. They also each earn Social Security credits based on their reported Schedule C income.
Scenario 2: Couple Runs a Retail LLC in Florida
James and Lisa open a retail store in Florida (a common law state). Because Florida is not a community property state, their LLC must be classified as a multi-member LLC taxed as a partnership. They cannot elect QJV status.
| Decision | Result |
|---|---|
| Formed LLC in a common law state | QJV election is not available |
| Filed Form 1065 partnership return | Each spouse receives a separate K-1 |
| Both spouses pay SE tax on their K-1 income | Combined SE tax is $38,250 on $250,000 income |
| Elected S-Corp taxation in Year 2 | SE tax drops to $18,360 with $60,000 salaries each |
After one year of high SE taxes, James and Lisa elect S-Corp treatment and cut their combined payroll tax bill by nearly $20,000. They also set up a 401(k) plan to maximize retirement contributions on their salaries.
Scenario 3: One Spouse Active, One Spouse Passive in California
David owns a software development LLC in California. His wife Rachel invested capital but does not work in the business. David names Rachel as a member with a 40% ownership stake.
| Decision | Result |
|---|---|
| Rachel does not materially participate | QJV election is not available (fails material participation test) |
| LLC files as a partnership (Form 1065) | Both spouses receive K-1s |
| Rachel’s income may avoid SE tax | Because Rachel functions as a passive partner, her share may not be subject to SE tax — but this position is aggressively scrutinized by the IRS |
| Operating agreement documents roles | Protects the couple’s chosen allocation during an audit |
Rachel’s passive status could shield her income from SE tax under Section 1402(a)(13), but this is a nuanced position. The IRS may argue that because David materially participates, Rachel is deemed active under Section 469(h)(5). The couple should work with a tax professional to document and defend their position carefully.
Asset Protection and Liability
One of the main reasons married couples form LLCs is to protect personal assets from business liabilities. An LLC creates a legal wall between business debts and personal property — including the family home, personal bank accounts, and retirement savings.
A multi-member LLC (which is what most spousal LLCs are) offers a particular advantage: the charging order protection. If a creditor obtains a judgment against one spouse personally, the creditor generally cannot seize LLC assets. The most a creditor can obtain is a charging order against that spouse’s distributions from the LLC. If the LLC chooses not to make distributions, the creditor receives nothing. In a spousal LLC where one spouse has creditor problems, distributions can be redirected to the other spouse while the indebted spouse’s allocation is withheld.
This charging order protection is stronger in multi-member LLCs than in single-member LLCs in most states. Courts have more willingness to pierce the veil of a single-member LLC because there is no other member to enforce financial discipline. Adding your spouse as a second member can strengthen this protective shield.
How to Lose LLC Protection
The LLC’s liability shield can be destroyed through a process called “piercing the corporate veil.” This happens when a court decides the LLC is not a truly separate entity from its owners. The most common triggers include:
- Commingling funds: Using the LLC bank account for personal expenses or depositing personal income into the LLC account
- Undercapitalization: Starting the LLC with insufficient funds to cover foreseeable liabilities
- Ignoring formalities: Failing to maintain a separate bank account, not following the operating agreement, or not keeping meeting minutes
- Fraud or misrepresentation: Using the LLC to deceive creditors or hide assets
For married couples, the temptation to commingle is especially strong. The family checking account may seem like the easiest place to deposit business income — but this single mistake can expose both spouses’ personal assets to every business creditor.
Divorce and the Spousal LLC
Divorce is one of the most overlooked risks for husband-and-wife LLCs. If the couple did not include divorce provisions in their operating agreement, the split can be messy, expensive, and destructive to the business.
Community Property vs. Equitable Distribution
In community property states (like Texas and California), the LLC is generally considered jointly owned marital property and will be divided equally. In equitable distribution states (like Florida and New York), the court divides the LLC based on what it considers fair — which is not always 50/50.
Even if one spouse formed the LLC before the marriage, the court will examine whether marital funds were invested in the LLC, whether the other spouse contributed labor or expertise, and whether business profits were commingled with marital funds. The more successful the LLC, the more motivated the opposition becomes in claiming a share.
Options for Dividing the LLC
Courts and couples typically choose one of these paths:
| Division Method | How It Works |
|---|---|
| Buyout | One spouse purchases the other’s membership interest at fair market value |
| Sale | The LLC is sold entirely and proceeds are split between the spouses |
| Co-ownership | Both spouses continue as members (rare and usually impractical post-divorce) |
| Asset trade | The LLC’s value is offset by awarding other marital assets to the non-retaining spouse |
| Structured payments | The operating spouse buys out the other over time based on business performance |
Each option carries tax consequences. A buyout may trigger capital gains taxes for the selling spouse. An outright sale of the LLC can generate large tax bills for both parties. Structured payments create ongoing tax obligations for years. The single best protection is a well-drafted operating agreement that includes a buy-sell provision triggered by divorce.
Estate Planning and Succession
A husband-and-wife LLC is a powerful vehicle for estate planning. If one spouse dies, the surviving spouse can continue operating the business without interruption — but only if the operating agreement and estate documents are properly coordinated.
Transferring Membership Interests
The operating agreement should specify whether a deceased spouse’s membership interest passes to the surviving spouse automatically or whether it goes through the deceased spouse’s estate. If the interest passes through probate, it can be tied up in court for months or years. A better approach is to place the membership interest in a revocable living trust, which avoids probate entirely and allows the trustee to step in immediately.
Valuation Discounts
Family LLCs can provide significant estate tax savings through valuation discounts. Because a minority membership interest in an LLC is less marketable and less controllable than full ownership, it can be valued at a discount for gift and estate tax purposes. Parents can gradually gift membership interests to children, transferring wealth while maintaining control over the business through their managing member roles.
Adding Children to the LLC
Many spousal LLCs eventually bring children into the business as members. This requires amending the operating agreement, updating state filings, and redefining profit allocation. It also ends QJV eligibility because the couple is no longer the only LLC members. The shift can be beneficial for estate planning, as it allows the family to split income among more members and take advantage of lower individual tax brackets.
Formation Steps: How to Set Up a Husband-and-Wife LLC
Starting a spousal LLC follows the same general process as any LLC, with a few additional decisions unique to married co-owners:
- Choose your state of formation: This determines whether QJV status is available.
- Select a business name: Check availability with your state’s business registry.
- File Articles of Organization: List both spouses as members. Pay the state filing fee.
- Appoint a registered agent: This can be one of the spouses or a professional registered agent service.
- Draft an operating agreement: Cover ownership, management, profit sharing, dispute resolution, divorce, and death provisions.
- Obtain an EIN: Apply through the IRS EIN online application. Select whether the LLC has one member (QJV) or two members (partnership).
- Open a business bank account: This is mandatory for maintaining the LLC’s liability protection.
- Apply for business licenses and permits: Requirements vary by state, county, and industry.
- Get business insurance: General liability insurance protects against claims the LLC structure alone cannot cover.
Member-Managed vs. Manager-Managed
Every LLC must choose between two management structures. This decision affects daily operations, legal authority, and how the business appears to third parties.
| Feature | Member-Managed | Manager-Managed |
|---|---|---|
| Who runs the business | Both spouses equally | One or both spouses designated as managers |
| Authority to sign contracts | Both spouses can bind the LLC | Only the designated manager(s) |
| Best for | Couples who both want daily involvement | Couples where one spouse is passive or less involved |
| Default in most states | Yes | No — must be specified in the operating agreement |
For most husband-and-wife LLCs where both spouses are active, member-managed is the simpler and more common choice. Manager-managed is better when one spouse handles all operations while the other contributes capital or works a separate job.
Do’s and Don’ts for a Husband-and-Wife LLC
Do’s
- ✅ Do maintain a separate business bank account. Commingling funds is the fastest way to lose LLC liability protection.
- ✅ Do draft a detailed operating agreement. Even between spouses, written rules prevent costly misunderstandings.
- ✅ Do include divorce provisions. A buy-sell clause triggered by divorce protects the business and both spouses.
- ✅ Do evaluate your tax classification annually. As income grows, switching from partnership to S-Corp or QJV can save significant taxes.
- ✅ Do coordinate your LLC with your estate plan. Place membership interests in a trust to avoid probate and ensure a smooth transition.
- ✅ Do file your annual reports on time. Missing this separate state filing can result in your LLC being administratively dissolved.
Don’ts
- ❌ Don’t use the LLC bank account for personal expenses. This is commingling, and courts use it as the primary reason to pierce the veil.
- ❌ Don’t assume QJV status is automatic. You must affirmatively elect it by filing the correct schedules. If you file a Form 1065 partnership return, the IRS treats you as a partnership — and you cannot go back and claim you were not.
- ❌ Don’t ignore self-employment tax planning. A profitable 50/50 partnership can generate over $40,000 in annual SE tax that could be significantly reduced with the right structure.
- ❌ Don’t skip business insurance. The LLC protects personal assets, but it does not protect business assets from lawsuits. Insurance fills that gap.
- ❌ Don’t add your spouse as a member without understanding the consequences. Going from a single-member LLC to a multi-member LLC changes the tax classification, EIN requirements, and filing obligations entirely.
Pros and Cons of a Husband-and-Wife LLC
Pros
- Shared liability protection: Both spouses’ personal assets are shielded from business debts and lawsuits.
- Stronger charging order protection: Multi-member LLCs receive better creditor protection than single-member LLCs in most states.
- Tax flexibility: Choose from sole proprietorship, partnership, S-Corp, or C-Corp taxation depending on your state and goals.
- Retirement benefits: A spousal LLC can establish a Solo 401(k) with single-owner contribution limits if no non-spouse employees exist, allowing both spouses to contribute.
- Succession simplicity: If one spouse dies, the other is already an owner and can continue operations without disruption.
Cons
- Increased paperwork: Multi-member LLCs have more complex formation and annual filing requirements than single-member LLCs.
- Shared control: Disagreements about business decisions can spill into the marriage and create personal tension.
- Divorce risk: A divorce can force a sale, buyout, or court-ordered division that damages or destroys the business.
- Double SE tax exposure: In a 50/50 partnership, both spouses pay SE tax — doubling the Social Security tax ceiling compared to a sole proprietorship.
- Additional costs: Legal fees for a comprehensive operating agreement, potential accounting fees for partnership or S-Corp returns, and possible payroll costs.
Mistakes to Avoid
Mistake 1: Failing to Draft an Operating Agreement
Many married couples skip the operating agreement because they trust each other. The consequence is that the LLC defaults to state law provisions that may not reflect the couple’s wishes. During a dispute or divorce, there is no written framework for resolving disagreements, and the matter ends up in court at significant expense.
Mistake 2: Choosing the Wrong Tax Classification
A couple in a community property state who files Form 1065 when they could have elected QJV status pays unnecessary accounting fees for partnership returns and potentially higher SE taxes. Conversely, a couple in a common law state who tries to file as a disregarded entity will face IRS penalties for failing to file the required partnership return. The penalty for late filing of Form 1065 is $220 per partner per month, up to 12 months.
Mistake 3: Commingling Personal and Business Finances
Using the LLC’s bank account for groceries, mortgage payments, or personal bills is the single most common reason courts pierce the veil of an LLC. Once the veil is pierced, both spouses’ personal assets are exposed to every business creditor. The fix is simple: maintain a dedicated business bank account and never use it for personal transactions. If you must move money between personal and business accounts, document every transfer as an owner contribution or distribution on the balance sheet.
Mistake 4: Ignoring Divorce Planning
No couple expects to divorce when they start a business. But without a buy-sell provision in the operating agreement, the business becomes a weapon in litigation rather than a productive asset. Including a divorce-triggered buyout clause is not pessimistic — it is responsible planning that protects both spouses and the business itself.
Mistake 5: Not Keeping Up with State Compliance
Every state requires LLCs to file annual or biennial reports, pay franchise taxes or fees, and maintain a registered agent. Missing these deadlines can result in the LLC being administratively dissolved, which means the LLC’s legal existence — and its liability protection — ceases until it is reinstated. Set calendar reminders for every state filing deadline.
Alternatives to Adding Your Spouse as a Member
Not every couple needs a multi-member LLC. If one spouse runs the business and the other helps occasionally, consider these alternatives:
- Hire your spouse as an employee: Pay them a salary, withhold payroll taxes, and maintain a single-member LLC structure. This preserves simplified tax filing while giving the employee-spouse access to employer-provided fringe benefits.
- Hire your spouse as a contractor: If the help is sporadic, a freelance or contractor arrangement avoids payroll obligations — but the spouse must receive market-rate pay, and if you file jointly, the SE tax hits your household either way.
- Designate your spouse as a manager: In a manager-managed LLC, your spouse can make business decisions without being a member. This preserves single-member tax treatment while giving them day-to-day authority.
FAQs
Can a husband and wife own an LLC together in all 50 states?
Yes. Married couples can co-own an LLC in every state, but the Qualified Joint Venture tax election is only available in the nine community property states.
Can a husband-and-wife LLC be treated as a single-member LLC?
Yes, but only if the LLC is formed in a community property state and meets all QJV requirements under Revenue Procedure 2002-69.
Does a spousal LLC need an operating agreement?
Yes. While not legally required in every state, an operating agreement is essential for defining ownership, management, divorce provisions, and succession planning.
Can a married couple have different ownership percentages in their LLC?
Yes. Spouses can own any percentage (e.g., 60/40 or 80/20) as long as the split is documented in the operating agreement.
Is a husband-and-wife LLC taxed differently than other multi-member LLCs?
No, except in community property states where the QJV election allows the LLC to be taxed as a sole proprietorship instead of a partnership.
Can we add our children to a husband-and-wife LLC later?
Yes. You must amend the operating agreement, update state filings, and be aware that adding a third member ends QJV eligibility.
Does a husband-and-wife LLC protect assets during divorce?
No, not automatically. The LLC may be classified as marital property subject to division unless a prenuptial agreement or operating agreement says otherwise.
Can one spouse be an employee instead of a member?
Yes. One spouse can own the LLC while the other works as a W-2 employee with a salary and payroll tax withholdings.
Do both spouses receive Social Security credits in a spousal LLC?
Yes, if the LLC files as a partnership or QJV. Each spouse reports their share of income on a separate Schedule SE, which earns them individual Social Security credits.
Can a husband-and-wife LLC elect S-Corp taxation?
Yes. Any LLC with two or more members can file Form 2553 to elect S-Corp status, which can reduce self-employment taxes significantly.