Community Property Questions

[DHarris321]

I have three Community Property questions:

1) On the Community Property Income Adjustments screen, is our Community Property income determined by our individual taxable income--from our individual 1040s--or do I use the taxable total from our Mock Joint 1040?

2) When combining our individual taxable incomes, Turbotax adds a taxable Social Security amount to partner's income. Do I need to do anything with that? (If I reconfigure total joint income adding this amount and make adjustments it will just add in a different amount, and so on)

3) Self-Employment tax and Deductible Part pf Self-Employment tax show up on final Community Property screen. Why? Do I need to do anything with these numbers, such as adding them to Community Property Withholding Adjustments screen?

Thank you for any help you can offer

[KrisD15]

1. You should not have individual 1040's until AFTER you make the mock joint 1040 and then allocate the income to your individual 1040. 

You use the TOTAL, then allocate to each. 

2. If one spouse receives Social Security, and there is also common income, that common income may make the social security payments taxable. 

3. Yes, if the self-employment income is community property, then the tax and the credit would need to be split as well. 

Please look at IRS Pub 555 and your state laws for more clarity.

IRS 555

[DHarris321]

Maybe I wasn't clear, I'm asking these questions in regards to how I plug them into TurboTax:

1) TurboTax requests thst Individual 1040s be created before the Mock Joint 1040. So, apparently you're saying to use the Mock's income in regards to the Community Property Adjustment screen even though Turbotax says to create the Mock Joint after Community Property--on the zindividual 1040s--is configured

2) Like I said, so if I need to allocate these to Community Property, where do I plug them into TurboTax's tempkate?

[DianeW777]

Community property states usually require that your income be split 50-50.  Having said that, each state has nuances in their own laws that can make the calculations complicated.  Complete the Community Property worksheet once you have all the figures.

• How do I contact my State Department of Revenue?

If you have a situation where all of our income is under community property law, then each of you will be claiming half of income.  Your tax withholdings would also be split 50/50 between the two of you.

• Create Test Returns
• How to Compare Returns
• Married Filing Separately-Community Property
  • Begin by completing a MFS federal tax return for you and your spouse, as you'll need the amounts for different income categories, tax amounts, and all tax payments for each of you. If one of you plans to itemize deductions, the other person must itemize as well. Otherwise, you'll both have to use the Standard Deduction.

[hlstamper]

I want an answer to this, too. The MOCK does not prompt you to enter community property information. When you go to do the California return, the information is based on the MOCK and it does't prompt you to enter the community property information. How do you supply that information on your state return?

[PatriciaV]

Note that the Community Property interview will not appear unless your filing status is Married Filing Separately and your tax home listed under Personal Info is a community property state: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

The easiest way to find this section of TurboTax is to use the Find box at the top right side of the TurboTax header. Click on the magnifying glass, type in "8958", hit Enter, and click on "jump to 8958" to go directly to beginning of this topic.

If the Community Property interview does not appear from the "jump to" link, you can access the related form in TurboTax for Desktop using the Forms Mode.

1. Click the "Forms" icon in the TurboTax header.
2. At the top of the left column, click on "Open Form".
3. Type in "8958" and wait for the drop down to open with a line for Form 8958.
4. Click on this line, then click the "Open Form" button. This will open the form in the large window.
5. You will need to complete the form manually by allocating Column A amounts to Columns B and C.