Ask an AI Accountant

In a community property state like Texas, income from a sole proprietorship or an LLC treated as a disregarded entity is usually considered community income, which means it is split equally between the spouses for tax purposes. However, simply depositing your profits into your husband's business bank account does not exempt you from paying self-employment tax. As long as you're actively working in your online business and generating taxable income, you're generally required to pay self-employment tax on your share of the profits, regardless of which bank account the money is deposited into. Self-employment tax is used to cover Social Security and Medicare taxes for self-employed individuals. It's important to accurately report your income and pay the appropriate taxes to avoid potential issues with the IRS. Consider consulting a tax professional to help you understand how the community property rules and self-employment taxes apply to your specific situation.