What does Community Property Addition Adjustment mean? or Community Property Subtraction Adjustment mean? and how are those amounts determined?

[jazzjester]

That's really great stuff! Now back to pluses and minuses. Adding and subtracting. This does complicate matters. Spreadsheets help. Gracias!

[amanda536]

What if you are going through a divorce and you don't know how much your spouse made in 2020?

[JotikaT2]

I recommend at least reporting your income in the tax return and doing your best to obtain the information for your spouse. 

You will need to file as Married Filing Separately (or Head of Household if you qualify) to ensure your return is prepared to the best of your ability.

Head of Household Qualifications

Please see the links below for additional information to guide you as you prepare your tax return.

Filing separately in a community property tax help

Tips for taxes when getting divorced

Publication 504 - Divorced or separated individuals

[ashley_reilly5683]

My wife and I were married for 3 months of the year. How do I calculate partial community property?

[KrisD15]

Community Property Rules only apply if you are filing Married Filing Separately. 

If this is your situation, you would only split the applicable income earned AFTER marriage. 

Anything earned before marriage would go to the spouse who earned it at that time. 

IRS Pub 555

[nataliacanada]

On the 'Community property income adjustments' screen in Turbotax desktop, when I'm putting in the addition/subtraction for both partners, should I be just allocating the sum of our incomes, incl relevant dividends and interest? Or should I be netting out deductions like capital losses, self-employment qualified business loss, HSA contributions etc? 

Thank you, 

[PatriciaV · Accepted solution]

Per Expert MaryK4:

When you are doing the Community Property allocation you will take the TOTAL for the community property for each category then divide it in half.  For the amount attributed to each spouse, you add or subtract to make up the difference of the half.  For example:

If Bob made $800 and Mary made $200 the total wages are $1000.  One half is income to each spouse- which is $500.

Because Bob made more, he would have a subtraction to get his $800 to $500.  Mary would have an addition of $300 to get her to $500.

And yes, your adjustments should include all income and deductions, regardless of source or type.

Also, if you need to find the community property worksheet online, see this link: Married filing separately in Community Property states.  You may find it easier to switch to the desktop software.  The link does provide guidance on this option.

@nataliacanada