When handling community property addition adjustments in TurboTax, you should use the gross income of both you and your spouse. Click here for additional details on Married Filing Separately in community property states.
When handling community property addition adjustments, see the following steps:
- Calculate Total Community Income:
- Add up the gross income from all sources for both you and your spouse.
- Divide the total equally between the two of you.
- Each spouse should report half of the total community income on their individual tax return
- Adjust Income:
- Subtract the reported income on your tax return from the total community income.
- This difference is what you add or subtract for the community property income adjustment
If you're using TurboTax Online, we recommend that you transfer your return to the TurboTax Desktop version. You can save time by entering less information.
Steps for Filing MFS in a Community Property State with TurboTax Desktop
- Start with Federal Returns:
- Open TurboTax Desktop and begin a new tax return.
- Began Personal Information section
- Select the filing status as Married Filing Separately (MFS) (select no at question do you want to file this return with your spouse)
- /if one spouse itemizes deductions, the other must also itemize. Otherwise, both must use the Standard Deduction
- Enter Community Property Adjustments:
- Use the search bar in TurboTax Desktop to search for "community property" and tap the enter bar.
- Click on the "Jump to community property" link that appears
- On the Community Property Income screen, select "Yes" to indicate that you need to enter community property adjustments.
- Follow the instructions to enter the required income and withholding adjustments
- Complete the Community Property Worksheet:
- TurboTax will generate a worksheet (screen) to help you split income and withholding between spouses.
- Carefully follow the instructions on the worksheet to ensure accurate entries
- Review and Finish:
- Review your tax returns for accuracy.
- If the IRS rejects your e-file (error code 0103), print your return along with the community property worksheet and mail it to the IR
TurboTax Desktop will guide you through each step to help ensure compliance with community property rules.