Correct me if I'm wrong but here is a simple example of how to populate TurboTax based on your advice. I've listed the TurboTax sections, fields and values to input for those fields:
Spouse 1 W2 from Company A
-Box 1 (Wages, tips, other comp.) = $60,000
-Box 2 (Federal income tax withheld) = $15,000
Spouse 2 W2 from Company B
-Box 1 (Wages, tips, other comp.) = $40,000
-Box 2 (Federal income tax witheld) = $7,000
Spouse 1's Tax Return
-Wages and Income
--Input Spouse 1's W2 Tax Return exactly as presented in W2. NO splitting here. Do NOT input Spouse 2's W2.
Now we're done inputting W2s. Next is the Community Property Income (which you called "Jump to 8958")
-Community Property Income Adjustments:
---Community Property Subtraction Adjustment = $10,000
-Community Property - Wages:
--Company A: You=$30,000. Partner/Spouse=$30,000. Total Wages=$60,000
--Company B: You=$20,000. Partner/Spouse=$20,000. Total Wages=$40,000
-Tax Withholding Adjustments:
--Tax Withholding - Subtraction Adjustment
---Federal Amount= -$7,500
-Enter Your Spouse's Community Income:
--Taxes Withheld: You=$7,500. Spouse=$7,500. Totals=$15,000
Then, if you switch to Forms view in TurboTax you will see the 1040 lines populated as follows:
Line 1 = $60,000
Line 8 = $-10,000
Line 25a = $15,000
Line 25c = $-7,500
Important notes on this method:
1040 Line 1 and Line 25 does not take into account Spouse 2's W2. Spouse 2's W2 info is only recorded in 8958 and it does not make changes to the overall return.
Understand this is a different method to arrive at the same final amount owed/refunded to taxpayer. TurboTax makes income and withholding adjustments on Lines 8 and 25c. Instead, my CPA records $50,000 on Line 1 ($60,000+$40,000=$100,000, $100,000/2=$50,000) and $11,000 ($15,000+$7,000=$22,000 $22,000/2=$11,000) on Line 25a.
