Business Owned and Operated by Spouses

If you and your spouse jointly own and operate an unincorporated business (nonfarm or farm) and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Do not use Schedule C (Form 1040) or Schedule F(Form 1040). Instead, file the appropriate partnership return.

Exception—Qualified joint venture (QJV). If you and your spouse materially participate (see Material participation in the Instructions for Schedule C (Form 1040)) as the only members of a jointly owned and operated business, and you file a joint Form 1040-SS for the tax year, you can make a joint election to be taxed as a QJV instead of a partnership.

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 your respective interests in the venture. Each of you must file a separate Schedule C (Form 1040) or Schedule F (Form 1040), as well as a separate Schedule SE (Form 1040). On each line of your separate Schedule C (Form 1040) or Schedule F (Form 1040), you must enter your share of the applicable income, deductions, and losses. For more information on this election, see the Instructions for Schedule E (Form 1040).

For more information on QJVs, go to IRS.gov/QJV . Rental real estate business. If you and your spouse make the QJV election for your rental real estate business, in most cases, the income isn’t subject to SE tax (for an exception, see item 3 under Other Income and Losses Included in Net Earnings From Self-Employment in the Instructions for Schedule SE (Form 1040)).

If the QJV election is made for a farm rental business that isn’t included in self-employment, the income isn’t subject to SE tax. Don’t include the income on Form 1040-SS. Depending on the source of the income (territory, U.S. source, or other foreign source), you may need to file other tax forms. See Pub. 570 and Form 4835, Farm Rental Income and Expenses, for more information.

Community income. 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. territory, the income and deductions are reported based on the following.

• If only one spouse participates in the business, all of the income from that business is the self-employment earnings of the spouse who carried on the business.

4 Instructions for Form 1040-SS (2025)

• If both spouses participate, the income and deductions are allocated to the spouses based on their distributive shares.

• If either or both you and your spouse are partners in a partnership, see Partnership Income or Loss in the Instructions for Schedule SE (Form 1040).

• If you and your spouse elected to treat the business as a QJV, see Exception—Qualified joint venture (QJV), earlier.