We recently got married and I'm thinking ahead, just because I want to be prepared. :-)

We both work FT jobs, but I also have a side company creating web applications. It's a single member LLC that gets passed through to my 1040 (pretty simple I would assume). With that said, I'm wondering if it's worth the "risk" of filing as "Married Filing Jointly." I understand if there's an audit, we would be both at risked. While I don't like to think about it, I would still like to shield my wife and family from such things if it were to happen.

On the flip side, if we go the other route, we lose out on some important deduction like child credit and what not. Anyone here in the same boat who can attest to either or?

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    I recall as a youngster (early 20s) hearing my mom say she didn't itemize. She thought it was an audit risk. "Ma? You have your W2 to substantiate the city/state tax, the real estate tax bill, and thank you letter from charities. Let the suit come visit, I'll make the coffee." The risk of audit is low, and nothing to fear if your return is accurate. Don't be like my mom. – JTP - Apologise to Monica Apr 28 '12 at 0:13

Why would you be at risk if get audited? Are you getting deductions that you cannot substantiate? If so - don't.

I would consult with your preparer, but being an owner of a single-member LLC myself, can't think why would it put you in any danger if you're not doing anything wrong. I mean, yeas, Schedule C raises your chances to get audited, but other than an annoyance I don't see much trouble in that. Keep all your receipts, be on the conservative side (and keep safe distance from "creative" tax preparers), and you'll be fine.

On the other hand, as you said, you're missing out deductions that you would otherwise be entitled to (child tax credit - I guess your and your wife's AGI's are significantly different, right?), so why?

  • Nothing special and no outrageous deduction to speak of. Just the thought of it happening and having to pull my wife into it is something I want to avoid. With that said, I'm at 77k and she's at 67k a year). – luckytaxi Apr 27 '12 at 22:45
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    @luckytaxi Check the options and compare, you can have your tax preparer do that for you and advise. I can do that for 2012 if you want, you can contact me through my blog (click on my username for the link). – littleadv Apr 27 '12 at 22:49

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