Married Filing A Separate Return

[Christian]

I have two clients both over 65 yoa who have married. He owes an outstanding and ongoing tax liability for which he is paying $100 a month. His refund is taken every year until this is paid off. In reviewing the MFS filing status I find she has $20,000 of useable itemized deductions and he gets the standard deduction. The ATX software indicates if I assign her $20,000 to her I must reduce his deduction to $7,000 on his return. The IRS instructions advise each can use their own deductions which would indicate she uses itemized and he gets the $13,500 standard for his return. Which is it ?

[Lion EA]

If they are MFS and she itemizes, then he must itemize also. Otherwise, his standard deduction is zero.

Or, they could file MFJ with an innocent spouse form for her included.

[Christian]

That will be my solution as he as no itemizable deductions and their combined standard deduction of $27,000 is greater than any itemized deductions.  I would expect the Service will simply deduct his $252 in tax withheld and send them the remaining refund balance.

[grandmabee]

Fill out the injured spouse form.  There is a calculation that is done.

[Christian]

I filled it in and divided the income as indicated but I saw no calculator and assumed the service would do anything further.

[GraceNY]

37 minutes ago, Christian said:

I filled it in and divided the income as indicated but I saw no calculator and assumed the service would do anything further.

The IRS will make the calculation.  It may not be what you think it should be so I would advise clients accordingly.