Farmer's Tax Guide›2025 Returns›12. Self-Employment Tax
! operated by spouses as co-owners
2025 Publ 225 (PDF) · 2026-10-03 edition · updated 2026-10-04 · United States
CAUTION (and not in the name of a state law en-
tity) qualify for the election. Thus, a business owned and operated by spouses through a limi- ted liability company does not qualify for the election of a QJV.
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, you can treat your wholly owned, unincorporated business as a sole proprietorship, instead of a partnership. Any change in your reporting position will be treated as a conversion of the entity.
Report your income and deductions as follows.
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.
If both spouses participate, the income and deductions are allocated to the spouses based on their distributive shares.
If you and your spouse elected to treat the business as a QJV, see Qualified joint ven- ture (QJV) , earlier.
States with community property laws include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. See Pub. 555 for more information about community property laws.
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