ATX MFS-community property state

[7204 MEM]

Hello:

What is the best way to enter W-2 wages (when both spouses work) in ATX for a MFS return in a community property state? Each spouse needs to report 50% of both W-2's.

Same question for a Schedule C business. Both spouses need to receive 50% of the profit even if only one spouse owns the business.

[Maribeth]

Hello:

What is the best way to enter W-2 wages (when both spouses work) in ATX for a MFS return in a community property state? Each spouse needs to report 50% of both W-2's.

Same question for a Schedule C business. Both spouses need to receive 50% of the profit even if only one spouse owns the business.

Enter everything on each spouse's return, just as if they were MFJ. Create a spreadsheet showing all income and the split between the two spouses. Use the adjustment that you determine to make an entry on line 21 as a negative amount reducing the income. (i.e., Husband's share is 52000, wife's share is 49000. On his return line 21 will be (49000), on her return line 21 will be (52000).

Also remember that you cannot split the SE tax. That must be calculated and paid by each person on their total SE income.

Maribeth

[ljwalters]

Don't forget both the Estimates and the withholdings are also divided.

Linda and buddy

[7204 MEM]

Don't forget both the Estimates and the withholdings are also divided.

Linda and buddy

Yes, thank you. So in ATX do you override the W-2 form input fields for the withholdings & estimated pmts?

[Pacun]

Yes, thank you. So in ATX do you override the W-2 form input fields for the withholdings & estimated pmts?

The last time I overrode something in ATX, I got different results. Make the calculations first and then plug in the right numbers without overriding.

[Julie]

I would not change the w2 fields, but there is a line 7 worksheet where you can put in all the adjustments. For the Sch C, I put the adjustments on line 21.

[Cathy]

Before you separate Sch C income, see Publication 504, Page 22.

Cathy