If you own a business together and both materially participate, and it is not organized as a corporation or LLC, you have 3 options.
1. Spouse A is sole proprietor and files schedule C, and spouse B is an employee, is paid wages for their participation, gets a W-2, and all the other stuff that goes along with being an employee.
2. Spouse A is sole proprietor and files schedule C, and spouse B is an independent subcontractor, gets paid for their participation, spouse A issues a 1099-NEC, and spouse B files a schedule C as a subcontractor.
3. The spouses elect to file as a "qualified joint venture." Each spouse files a schedule C for their share of income and expenses.
I don't think Turbotax has an automatic selection for "qualified joint venture", just set up one spouse's schedule C and then go back and set up the other schedule C.
If the business is organized as an LLC, then the spouses must file a partnership return form 1065, which uses a different tax program. Each spouse gets a K-1 statement from the LLC that goes on their personal tax return.
However, if the business is an LLC, and the only members are the spouses, and they live in a community property state, they do not file a 1065 partnership return and instead use option 3 above.
