Should My Spouse Own my Business Too? Should I Pay Them? [E184] - Business By The Numbers

About this episode

Thanks to our partner PromotiveBeing married while owning a business isn’t just about love and partnership—it’s about liability, taxes, estate planning, and protecting your family’s future. In this episode of Business By The Numbers, Hunt Demarest, CPA with Paarmelis & Associates, pulls back the curtain on one of the most common yet misunderstood questions business owners face: should your spouse be on the business, the payroll, or the tax return?From his own estate planning experience at 37 to the real-world pitfalls he’s seen in auto repair shops across the country, Hunt shares what every entrepreneur needs to know before signing their spouse onto ownership or payroll. This episode covers everything from joint tax filing risks to payroll tax traps—and even the little-known IRS relief provisions like innocent spouse and injured spouse rules.What You’ll Learn:(00:40) Estate planning and why spousal ownership mattersWhy estate planning is crucial at any age (yes, even in your 30s).The difference between assets and liabilities when transferring ownership.Why lawyers and accountants often approach planning differently.The hidden costs of joint ownership in businesses vs. brokerage accounts.(05:56) Spouses, liability, and your businessWhy putting your spouse on the business could expose them to payroll and sales tax liability.The dangers of “splitting ownership” just to be fair.Why estate tax benefits often don’t outweigh liability risks.A real-world example of how the IRS can pursue both spouses if one is on the books.(12:00) Innocent spouse vs. injured spouse: IRS relief explainedThe difference between innocent spouse relief and injured spouse relief.When each applies—and why you hope you’ll never need them.Why filing separately almost never makes sense (and when it might).(16:18) Payroll, joint filing, and the “nuclear option”Why paying your spouse rarely saves taxes—and can cost thousands in payroll tax.When it does make sense to put your spouse on payroll (hint: retirement accounts, health insurance).Why joint filing almost always beats separate returns.The rare scenarios where keeping your spouse off the business can protect your familyHunt wraps up with a reminder: marriage and business both require careful planning. Talk to your spouse, your lawyer, and your accountant before making big ownership or payroll decisions—because the wrong choice could cost far more than you think.Thanks to our partner PromotiveIt’s time to hire a superstar for your business; what a grind you have in front of you. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.Paar Melis and Associates – Accountants Specializing in Automotive RepairVisit us Online: www.paarmelis.comEmail Hunt: podcast@paarmelis.comText Paar Melis @ 301-307-5413Download a Copy of My Books Here:Wrenches to Write-OffsYour Perfect Shop The Aftermarket Radio Network: https://aftermarketradionetwork.com/Remarkable Results Radio Podcast with Carm Capriotto https://remarkableresults.biz/Diagnosing the Aftermarket A to Z with Matt Fanslow https://mattfanslow.captivate.fm/Business by the Numbers with Hunt Demarest https://huntdemarest.captivate.fm/The Auto Repair Marketing Podcast with Kim and Brian Walker https://autorepairmarketing.captivate.fm/The Weekly Blitz with Chris Cotton https://chriscotton.captivate.fm/Speak Up! Effective Communication with Craig O'Neill https://craigoneill.captivate.fm/