topic Answer does not address the question. in Deductions & credits

How do I calculate the Tax Withholding Addition/Subtraction Adjustment amounts for community property?

willjessrodrigue — Thu, 06 Jun 2019 12:26:17 GMT

If you live in a community property state, you will gener...

JaimeG — Thu, 06 Jun 2019 12:26:19 GMT

If you live in a community property state, you will generally split it all 50/50. Some states have specific rules regarding the split, but most community property states follow the 50/50 rule. The exception would be income earned on assets or investments that were owned by a spouse prior to the marriage and not commingled. Also, inherited income that was not commingled.

For Example; You earned $100,000 of income and your husband has $60,000. Jointly you have $160,000 and in a Community Property State you each have $80,000.00. So in this case you will have subtracted $20,000 to your income and your husband would have added $20,000 to his.

Community Property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

FYI - When you file as Married Filing Separately, if one spouse itemizes on Schedule A, the other must also itemize on Schedule A.

For RDP in Nevada do we do the 50/50 split same for "Tax...

bekavegan — Thu, 06 Jun 2019 12:26:20 GMT

For RDP in Nevada do we do the 50/50 split same for "Tax With Holdings" My RDP reported $9000 in federal taxes paid on his W-2. I paid nothing in taxes on my 1099-misc. So do i add half his taxes withheld at $4500?

How do you figure out the amount to adjust your withholdi...

shawnejbird — Thu, 06 Jun 2019 12:26:22 GMT

How do you figure out the amount to adjust your withholdings? We get the 50/50 rule. This answer doesn't answer the question asked.

Is this amount based on AGI or gross income?

christopherbusch — Thu, 06 Jun 2019 12:26:23 GMT

Is this amount based on AGI or gross income?

Answer does not address the question.

shaker907 — Thu, 06 Jun 2019 12:26:25 GMT

Answer does not address the question.

Re: How do I calculate the Tax Withholding Addition/Subtraction Adjustment amounts for community property?

ssaxena925 — Mon, 06 Feb 2023 23:45:59 GMT

You can use this calculator https://apps.irs.gov/app/tax-withholding-estimator/income-and-withholding/

Re: How do I calculate the Tax Withholding Addition/Subtraction Adjustment amounts for community property?

biztaxlady1 — Wed, 08 Mar 2023 19:42:51 GMT

This IRS manual may give a principle to consider on this question (I am not a tax lawyer -- so consult a tax attorney to be sure what applies to your situation).

25.18.1.2 (03-04-2011) Property Rights and Federal Taxation
Federal law determines how property is taxed, but state law determines whether, and to what extent, a taxpayer has "property" or "rights to property" subject to taxation. Aquilino v. United States, 363 U.S. 509 (1960); Morgan v. Commissioner, 309 U.S. 78 (1940). Accordingly, federal tax is assessed and collected based upon a taxpayer's state created rights and interest in property.

25.18.1.2.4 (03-04-2011) Tax Assessment and Collection under Community Property Laws
For income tax purposes, if spouses file separate returns, each spouse is taxed on 50% of the total community property income regardless of which spouse acquired the income. Poe v. Seaborn, 282 U.S. 101 (1930). In addition, each spouse is taxed upon 100% of his or her separate property income. Community property may also affect basis in property.

Source: https://www.irs.gov/irm/part25/irm_25-018-001