Confused on Federal and State Filing for Registered Domestic Partnership

[heavensclone1]

Per the Oregon gov site:
"Registered domestic partners (RDP) in Oregon receive the same tax treatment as married individuals. Just like a married couple, you and your partner may file jointly or separately. As an RDP, you can't file using the single filing status on your Oregon return."

Now, when I was filling out TurboTax online, it told me I had to purchase the Desktop version (Deluxe) since I am in an RDP.  In the Desktop version under "PERSONAL INFO", I have it listed with the following:

Marital Status: Registered Domestic Partnership
Your Filing Status: Single

Is this used for just the Federal return, or will this information be included for the State Return, as well? I don't see anywhere else that lets me change my filing or marital status during the State section.   The plan is for us to filing our taxes separately. 

Any help is appreciated!

[KeshaH]

The IRS doesn't recognize registered domestic partnerships as married couples for tax purposes. Partners in an RDP can't file married for federal tax purposes. You must file Single on your federal tax return (unless you are the head of the household). You can file together or separately on your state tax return. You will be able to make the choice on how you file your state return within the TurboTax Desktop program.

When you're in an RDP in Oregon, you each will need to file a federal return as single and then you'd also need to prepare a third return as if you were filing married.

[heavensclone1]

Thanks for the info. Let me recap to make sure I have this correct. The process for us should be:

1. I fill out and e-file my federal return as Single
2. My partner fills out and e-files their federal return as Single.

For the 3rd federal return we need to prepare (this "as-if" one), is there a specific field for "as-if" we can select in TurboTax Deluxe or do we just select "Married"?

Also, once this 3rd federal return is prepared, do we e-file it as well? Or do we need to just print it out and attach it to our State returns? I've heard that because of being in an RDP, we have to mail in our State returns and attach this third federal "as-if" return to it. Is this correct?  

[KrisD15]

No, there is not a "what-If" filing status, please use Married Filing Jointly as if that was recognized on a federal return for RDP.

No, you do NOT file the "Mock" Federal return to the IRS. This "What-If, Mock, Married Filing Jointly" federal return is ONLY for the state requirement.

Yes, print the "What-If, Mock, Married Filing Jointly" federal return Form 1040 and include it with the state return. 

Yes, most states require both returns are mailed.  Check the instructions the TurboTax software gives you with the completed state return.

HERE is a link for tips concerning California, Nevada, and Washington 

HERE is a TurboTax Tax Tip

[lmh21067]

I am a RDP in California.  Using the Desktop version, I have prepared my fed return and my partner's (both as Single).  I have also prepared the Form 8958 for the allocation to adjust our federal income.  But Turbotax does not import the 8958 into our 1040's.  It only calculates the taxes based on our individual data.  What am I missing?   I was on the phone for two hours with a Turbotax expert and she did not know the answer (or the process).  Any suggestions appreciated.  THANKS

[KeshaH]

For federal tax purposes you're filing Single, so there's no community income to split. You won't need a Form 8958 for your federal return. 

For your state return, however, if you choose to file separately, you'll need to allocate the income. You'd create new federal returns for each of you using the filing status Married Filing Separately and prepare the federal return as such. Then the appropriate income would flow to your state returns.

[lkf1]

I am in the same situation, and I understand this conceptually, but how do I actually start a second married filing separately federal return to file with the state return in TurboTax?

[heavensclone1]

I was confused, as well, but I'll tell you how I got past it. I purchased and downloaded Turbo Tax Deluxe (after the Online TurboTax I usually fill-out said I needed to use it).  Also, I've had to use AuditDefense by TurboTax in the past, so I HIGHLY recommend adding it. Below was my process for filing in Oregon as an RDP:

FEDERAL
1. I start a new return on TurboTax Deluxe.

2. I fill out the whole thing (Status: Single, Marital Status: Registered Domestic Partner) and get near the end. I am prompted how I want to process this. Choose "e-file" ONLY for FEDERAL. You will NOT be processing your STATE return.  I'm unsure if I could have just skipped the entire STATE section, but I kept getting errors so I just powered through it.
3. Confirm only your FEDERAL was e-filed. 

4. Have your RDP do the exact same thing for their own FEDERAL return. Confirm only their FEDERAL was e-filed, as well.

FEDERAL ("Mock" or "As-If")

1. Start a new return in TurboTax Deluxe. 

2. When prompted, make sure you choose "Married" and filing "Jointly".

3. Complete your FEDERAL part by filling out/uploading every form between you and your RDP.  For example, if she has 2x W-2 and you have 1x W-2, you are putting all 3 in.
4. Get to the end, but DO NOT E-FILE!  Only print out this new FEDERAL return.  Make sure you not only print it, but save it as a .PDF so you have a backup, as well. Once printed, set it aside for later. This is your "Mock"/"As-If" copy. Its sole purpose is to be mailed with the STATE return.

STATE - OREGON
1. Once the FEDERAL returns were e-filed, decide on whether you want to file your STATE jointly or separately. There are pros and cons to both. I decided to do jointly (mainly because I was so done with this process and didn't want the extra work and papers. Don't be like me).
2. Start a new return in TurboTax Deluxe.
3. When prompted, select "Married" and either filing "Jointly" or "Separately"; whichever you decided on. For the rest of my instructions, it will assume you are filing "Jointly".
4. I don't know if there is a way to skip the FEDERAL part; the only important part is the STATE. But, go ahead and complete this tax return factoring in both of you when answering the questions.
5. Near the end, DO NOT E-FILE! Only print out the STATE return, and save it as a .PDF for a backup, as well. Set your STATE return aside.

FINAL STEPS

1. Now that you have your FEDERAL "Mock"/"As-If" return and the STATE return printed, follow ALL the instructions CAREFULLY on Page 1 of that printout. I almost accidentally mailed my returns with those instruction pages as the cover pages.  For example, I missed the part where it wanted certain copies of our W-2 forms attached.  Also, I don't believe you are allowed to staple things on the STATE return. There are some odd rules, so attach it some other way.  There are picture examples of where to attach it on the return.

2. After reading the instructions carefully, make sure you both sign the fields in your STATE return that are required. Go through the pages carefully.  I wasn't sure we needed to sign the FEDERAL Mock"/"As-If" return, but we did anyway.

3. I purchased a large envelope from UPS, put both my FEDERAL "Mock"/"As-If" and STATE return (with all their attachments) into the envelope.  I sealed it, had UPS put my name and the RDP's name on the "From" section, and mailed it to the address specified on the TurboTax return's STATE instructional page.  They had to mail it out as USPS. Make sure you have tracking, and save that tracking number.

I hope this helps. I'll be doing post-editing for minor spelling or grammar errors.

[lkf1]

Thank you, that is helpful, I appreciate it!

I do have a couple of follow up questions that you (or someone) may be able to help with.

First, you mentioned the mock federal filing should be done as "married, filing jointly", but is there a reason we couldn't do two separate mock versions, each as "married, filing separately"?  Or a reason why that would be a disadvantage?

Second, we own a home together and receive one mortgage interest statement.  Before we entered in to an RDP, we each claimed half with a note explaining that we were equally liable for the mortgage.  If we do have to or choose to file jointly, will it be an issue if we the interest separately for federal filing purposes, but together for state filing purposes?

[heavensclone1]

Q: First, you mentioned the mock federal filing should be done as "married, filing jointly", but is there a reason we couldn't do two separate mock versions, each as "married, filing separately"?  Or a reason why that would be a disadvantage?

A: According to Oregon Department of Revenue : Registered domestic partners : Individuals : State of Oregon, you can choose either. Under "Filing Your Oregon Tax Return", it says:

----------------

1. Use the single or head-of-household filing status on your actual federal return and send it to the IRS.

2. Use the married filing jointly or married filing separately status on your second "as-if" federal return and attach this to your Oregon return only. Don't submit this form to the IRS.

The filing status on your Oregon return must match the filing status on your "as-if" federal return.

----------------

In regards to advantages/disadvantages of filing jointly or separately, I just Google and reddit searched that.


Q: Second, we own a home together and receive one mortgage interest statement.  Before we entered in to an RDP, we each claimed half with a note explaining that we were equally liable for the mortgage.  If we do have to or choose to file jointly, will it be an issue if we the interest separately for federal filing purposes, but together for state filing purposes?

A: Unfortunately, I do not know. I have no experience with that type of mortgage situation.  Can a TurboTax expert chime in and answer this?

[AmyC]

1. Your mock federal should match your filing status, either MFJ or MFS.

2. Your mortgage interest on the federal being separate is not a problem with the state, either separate or combined. Your mock federal, if itemizing, will go along with this.

@lkf1