Spouse and I live in different states

[KashChai]

Hi,

I live in Texas and my wife lives in California. I haven't earned anything outside Texas and my wife hasn't earned outside California. Both of us rent in our respective states and don't own any property.

1. Can we MFJ (married filing jointly) for federal and then my wife MFS (married filing separately) for California?

2. For my wife to MFS in California can she just do a mock federal return using only her income and then file state tax with only her income? Or does he have to do something different ?

3. When filing CA state tax which federal income should be reported and should my wife include both the joint and mock federal returns in her state filing?

4. Can the state tax filing be done online or do we have to mail in the documents in our case?

It is confusing because both TX and CA are community property states. We have not lived together nor have property and TX doesn't require filing state tax. 

Please help.

[AmyC]

1. Yes. Since you were a nonresident the entire year, MFS is allowed for CA. See Filing Status.

2. Yes- with a caveat. CA FTB community property states: California is a community property state. When filing a separate return, each spouse/RDP reports the following:

• One-half of the community income
• All of their own separate income

Community property rules apply to the division of income if you use the married/RDP filing separately status.

3. The mock federal of MFS. The IRS will share the actual joint return that was filed with CA.

4. Mail in the state. She needs to sign and date, attach all required forms and mail with tracking- no signature required.

[KashChai]

Thank you very much for the quick reply Amy!

Just FYI in case it matters, this is our first year filing as married.

How am I supposed to enter the following:

• One-half of the community income
• All of their own separate income

In the TurboTax online it show be the below pictures. 
Say my income is $100,000 and my wife's income is $75,000 and we have our withholdings as $10,000 and $5,000 respectively what do I enter in the fields here?
Since my wife is in CA and she is filing the state tax how does she have to fill the "Community Property Addition Adjustment" and "Community Property Subtraction Adjustment"? And similarly how do we fill the Tax Withholding Adjustments section?

[MaryK4]

Because both Texas and California are community property states, you will both have to file California tax returns to report income so you may want to consider filing the joint return.  Your wife will have to report one half of her income and one half of your income.  You will have to file a nonresident return and report one half of her income.  

In the screens, your wife's adjustment would be an addition of 12500.  ( You add the income= $175,000/2= 87500 so she needs to add 12500 to her 75000).  Her withholding adjustment would be $2500.

@KashChai 

[KashChai]

Thanks for the reply MaryK4!

So, the steps are:
1. For federal -> file as MFJ 

2. For state -> I file as MFS (non-resident CA) and my wife files as MFS (resident CA)

Can I do all the above in the TurboTax online software in one filing ? In my TurboTax online account how do I file as CA non-resident and my wife as CA-resident?

[JotikaT2]

Yes, you can use TurboTax Online, but it will be easier if you use TurboTax Desktop.  Please see how do I prepare a joint federal return and separate state returns for more details to assist you.

[KashChai]

Thank you for the information. 

Which TurboTax desktop software version should I buy for my case?
Should I buy the Deluxe version of the TurboTax desktop software or is there a different version for my situation?

[AmyC]

I don't know everything your tax return includes so I will give you Turbo Tax Desktop comparison and let you know that if you reach a spot where you need to upgrade, it is super quick and easy. You click a button to upgrade and keep right on with your return. You can start with the lowest version you think you need.

[KashChai]

I got the Premier version of the TurboTax Desktop software.

We decided to file jointly for the State as well. So, we will have to file the 540NR for CA state tax.

In the state section it asks 

1. Tell us a little more about your home 

And provides only 1 address (my Texas address, do I not have to fill my wife's address in CA?) (FYI This is my turbotax account)

2.  It asks: About Your 2023 Tax Filing

Did you file a 2023 California tax return?

I didn't file a CA return in 2023, but my wife who lives in CA did file in CA 2023. What is the correct option here?

[MonikaK1]

If one of you used this TurboTax Premier account to prepare a California return and that is the one preparing the 2024 return, then respond "yes".

Per the California FTB, California is a community property state. If one spouse is a resident of California and the other is not, you may be required to report income earned outside of California. Texas is also a community property state.

Visit Guidelines for Determining Resident Status (FTB Publication 1031) for more information.

@KashChai