For tax purposes only, married couples have the ability to jointly work at a sole proprietorship without one half of the couple needing to file as either a business partner or employee, which gives company certain tax benefits and decreases the amount of necessary paperwork. The arrangement is called a husband-wife sole proprietorship and is not meant for spouses that want to act as business partners.
A husband-wife sole proprietorship allows a husband or wife to employ their spouse, without needing to file taxes such as self-employment or business partnership taxes, Inc. magazine reports. This also eliminates the record keeping associated with payroll that most employers have to file for non-spousal employees.
This arrangement has no title under the IRS, it is instead typically a "no questions asked" scenario. Instead it has been granted so that spouses can avoid other tax obligations.
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