Joint Income

[marinchip]

We file separately but have joint income for which we receive 1099s that report the same interest and dividend income for each of us.

We wish to each report half of the total in our individual TurboTax filings. Will the IRS recognize the action taken without some supporting explanation since the numbers reported will not agree with the 1099s?

Will splitting the income in disagreement with the 1099s cause electronic filing to fail?

[MarilynG1]

No, if you are filing separately, and have 1099's in both names, it is proper to each report half of the amount on your separate returns (or actually any split you both agree to).

Since on your MFS return, you give the SSN of your spouse, the IRS can see that the amounts reported on both returns add up to what is reported on the 1099.

If you're using TurboTax Desktop and care to use a 'What If' scenario to see what your returns look like MFJ vs. MFS, in FORMS mode, choose 'Open Form' and type in What-If.

@marinchip 

[marinchip]

We are are domestic partners, not married. I noticed that the joint account has only her social security number listed, but both of our names when we pull up the 1099s from either Schwab account. I think that is the way it was set up.

[marinchip]

After a little research the closest I have come to what to do with our situation is as follows:

1. My domestic partner needs to designate me as a nominee for half of the interest and dividends reported on the 1099 that lists both of us as joint owners but only lists her SSN.

2. She needs to provide me with1099s for half of INT and DIV. 

3. She may need to fill out a Form 1096 Transmittal Information Form

Problems

I can't seem to download the 1099 INT, !099 DIV or 1096 forms from the IRS.gov website

Don't think either of us will be able to electronically file if we take this route.

[MonikaK1]

The way you split the interest income will not affect either party's ability to e-file their return. 

The partner to whom Form 1099-INT is issued could also just choose to declare all of the income and then gift part of it to the other partner. 

Download a PDF of the Form 1099-INT here. Review the instructions as to how to complete and file the form if applicable.

Or, the partner not on the 1099-INT could report half as income and the other could report all of the 1099 and then select the option to adjust the interest as a nominee, and enter a negative number for the amount that person is not reporting. See screenshots below.

See this TurboTax tips article for more information.