IRS makes filing for husband/wife businesses easier

Legislation signed last week simplifies reporting for husband and wife owned businesses.

The new law, effective for tax years beginning after Dec. 31, 2006, allows a husband and wife who file a joint return to elect to report income or losses in proportion to their interest in the business and not as a partnership.

The husband and wife must be the sole owners of the business and both spouses must materially participate in the business to make this election.

See page 10 of the technical explanation of the Small Business and Work Opportunity Tax Act Of 2007 for more information on the Section 8215, Family Business Tax Simplification.