You will divide your 1099-DIV based on the rules for your residential state(s), as the type of state you live in governs how you divide your dividends on your return. If you live in a community property state you must split your dividend earnings, the IRS states that you must follow suit for your federal return. Community Property states are:states include:
If you live in any other state, you can chose who gets to claim your 1099-DIV, using whatever % that you and your spouse chose.
In TurboTax, do not select that you received this income as nominee, rather select other reasons.
For more information, See IRS Publication 504
You should each enter your income forms on your federal return and the information will flow through to the state return. Georgia is not a community property state so you do not need to divide the income between you. The state software will calculate the tax for each of you.
what about dividing on federal? We each got the same forms with the total interest and dividends on the joint accounts in both our names. We have previously filed jointly but now we're going through a divorce and are filling separately
Dividing your federal income still depends on the laws of the state you are filing in. The total must add up to 100%. If you are in a community property state you would divide 50/50. However in another state you may be able to divide however you agree with the other person(s).
So do I divide the total interest in my federal return or not?
Between the two of you 100% of the income must be reported. Since GA is not a community property state, you could put 0% on your return and your spouse 100% on theirs or vice versa. Or you could each put 50% on your respective returns or 75 / 25. Whatever you agree to as long as 100% is reported.
Ok, so how do I enter this in Turbo Tax? Do I adjust the dividends and interest to show I'm paying 50% as a nominee?
You will divide your 1099-DIV based on the rules for your residential state(s), as the type of state you live in governs how you divide your dividends on your return. If you live in a community property state you must split your dividend earnings, the IRS states that you must follow suit for your federal return. Community Property states are:states include:
If you live in any other state, you can chose who gets to claim your 1099-DIV, using whatever % that you and your spouse chose.
In TurboTax, do not select that you received this income as nominee, rather select other reasons.
For more information, See IRS Publication 504
Is this the same for 1099 INT? I receive all the 1099 INT & DIV's but they are joint accounts. We would prefer to keep my taxable income down. I am MFS, can I adjust the full amount on the 1099 INT and then my wife can take the full amount as a nominee, or does it need to be split 50/50?
The first person listed on the 1099 is the owner and must report the entire amount on their return. If there is a co-owner we can make an adjustment.
Other than community property states you can allocate zero to 100% to the other individual.
To enter a 1099-DIV or INT you should post it as normal to the Owners return.
You must then enter the amount to the other person's tax return.
Follow up to previous q&a.
1 - Please confirm, for NJ resident I can report Div, Int and Cap gains on joint accounts 100% on the lower income spouse return (married file separate) even if the primary ss# is the higher earning spouse. Or any split I choose.
2 - Can I do 0%/100% for Divided, but 50/50 for capital gain/loss?
4 - How is capital loss carryover handled if filed joint in 2019 - can each spouse get a portion to max out the $1,500 each?
Thank you
New Jersey is not a community property state.
You can split the joint dividend, interest, and capital gains in any proportion that you both agree to.
Use the proportions that are most beneficial to your returns.
If you live in a state that allows you to divide however you agree with the other person(s), can you change the % allocation from year to year in order to lower the overall tax burden taxes for that year, or do you have to maintain the % split every year?
It depends on the state. Please clarify to add that information to your question and we may be able to help you.
It's New Hampshire, so it is not a state that requires community property.
There doesn't seem to be an exact answer for that on the New Hampshire (NH) page for the interest and dividends (I&D) tax. However the tax rate (3%), is the same overall no matter who claims the income. It doesn't change on either return no matter how you split the income unless you find that if you split it, file separately, and the income is then below the filing requirement. The instructions provide details for individuals and joint filers with no separate instructions for married filing separately.
Call the Department of Revenue Administration, Taxpayer Services at (603) 230-5920 for clarification.
This I&D tax is repealed after December 31st, 2024.