Virginia help please!

[Catherine]

Client has a VK-1 from a Virginia partnership.  I've never seen one before, and have no idea what adjustments to make to the federal numbers for VA purposes.

Specifically: 

• VA income is slightly different from federal; no problem with that.  But on VK-1 Line 2 there are "Total deductions" of $37K that matches the 1065 K-1 Section 179 deduction figure.  Does this amount get entered separately on the VA return (and if so, where)? 
• And then there is Line 14, "Fixed date conformity - depreciation: - what on earth is this??  It doesn't match anything on the federal K-1 for me even to guess.
• Only the taxpayer, and not the spouse, has VA-source income.  They are both non-residents of VA.  Does the taxpayer really need to file as MFS for VA?  I have never, ever seen TEN over-ride choices for filing status and am both confused and bemused at the list.

I think them is my questions.  Whee!  And thanks in advance.

[Gail in Virginia]

I will give this a shot, but I am more used to resident than non-resident Virginia returns. 

* Typically, VA starts with federal AGI, so I don't know why the amount is different.  I would do a "pro forma" separate federal for just the federal income if I were doing this by hand, to see if he or she is eligible for section 179.  From the amount I would say that if eligible on the federal , will be on the state. Mostly VA has conformed with section 179 except for the last big bump in the limit.

*Fixed date conformity depreciation is any depreciation differences caused by differences in what is allowed on the federal and what VA allows.  Typically, this will be the bonus depreciation which has never been allowed in VA.  Depending on the year of depreciation, this could be an addition to income (line 2A) or a subtraction (line 6a). 

* For filing status, I would probably use MFS and only file on the taxpayer that has the partnership interest to keep the AGi as low as possible.  Unless one spouse has all of the income and the filing spouse can benefit by using their exemption and increased standard deduction. 

I hope this helps, but if I am not clear, perhaps one of the other VA preparers will help out or you can ask again and I will try again. 

[Catherine]

Thank you, Gail!  I closed out that return and won't look again until Monday, but I think what you have given will help me with most of the confusion.  However, if anyone else wants to chime in, I'm all ears!

[Gail in Virginia]

Catherine, do remember that the filing threshold for VA for MFS is $11,950.  If they don't have that much VAGI income, they are not required to file unless they have taxes withheld that they want to get back. 

[Christian]

Additionally, Virginia has an additional deduction of $12,000 available to folks over 65 yoa within certain income limitations. I believe it fazes out if you file separately and your combined marital income exceeds $75,000.

[Catherine]

9 hours ago, Gail in Virginia said:

Catherine, do remember that the filing threshold for VA for MFS is $11,950.  If they don't have that much VAGI income, they are not required to file unless they have taxes withheld that they want to get back. 

Is that amount total income, or taxable income?  

[TAXMAN]

That number is VA AGI. AS long as you are under this # no return required.

[Hahn1040]

VAGI on the form 763 is Federal adjusted gross with some adjustments for age deduction, social security, state tax refund and those plus and minus for Fixed date conformity.

Pretty much, if you are required to file federal and you have non-resident VA income, you are required to file 763.  The form prorates VA income to total income and taxes that.

i have one with a Virginia  rental:  net income of $230.  federal AGI: $160,000

Tax is $3

Virginia wants it!

and... they only file joint if BOTH have VA income.

VAGI for resident and part-year resident is only the VA income and if under the $11,950 then they don't have to file

[ROM DE GUZMAN, CPA]

Gail may I borrow your ATX 2008 tax program?  I have a license for it but I misplaced the actual cd.  my email is [email protected] and my phone is 323 337 2077.  thanks.

[Jack from Ohio]

Go to your MYATX page.  You can download the install program from there.

[jklcpa]

1 hour ago, Jack from Ohio said:

Go to your MYATX page.  You can download the install program from there.

Hmm, I'm not sure about this.  Last fall I loaned another member my disk from 2006 after the ATX rep said that they could only provide back to 2012.  Has ATX expanded the number of back years available since then?