Can a husband and wife be a “sole proprietorship?
Ownership of your business can be shared with your spouse and will still be classified as a sole proprietorship. The IRS views your spouse as a “co-sole proprietor.” Business profits may be split if you file separate returns or all profits may be reported on a joint Schedule C. Only spouses qualify to be a co-sole proprietor; no other family members quality. Check with your tax adviser for details.
No. Technically a husband and wife cannot jointly own a business as a sole proprietor; they cannot split a sole proprietorship and file two Schedule C and two Schedule SE. To avoid geing classified as a partnership, a husband and wife team operating a business together should treat one spouse as an employee and the other spouse as the owner.
