Marriage Filing Separately in California and question on split of income

[samba50]

Hello, I have been filing for MFJ for a very long time but due to a Traditional Roth Conversion for my non-working spose (planned) and and some deferred comp payment (unplanned didn't remember), I have a huge tax of $30K for federal and $9K for State. Hence I am contemplating if its better to file MFS for this year and question primarily related to income and deductions.  Since my spouse does not work, do I just reduce my income in half and add for my wife?

1. My Spouse has no income in 2020. We converted Traditional IRA (deductible) $98K value to Roth IRA which has no contribution for past several years due to income eligibility. We converted to Roth IRA so that we can do backdoor IRA contribution.

2. We are in California which is a Community Property State and half of the income is for other spouse even though the spouse doesn't work. I am using TurboTax Online version and my question is that I just divide below in half and manually enter in the respective form? For example: For my W2: should I make it $162K and then manually enter $162K for my Spouse? The goal here is to determine if I should file MFJ or MFS to minimize tax.

   • W2 Income (Him): $326K    Tax Withheld (Federal $57K  CA State: $23K)

   • 2019 State Tax Refunds (Joint): $2758

   • 1099-INT (Him): $2500

   • 1099-DIV (Him): $4500

   • 1099-R (Her): $98K (Traditional to Roth Conversion)

   • 1098 (Joint): $17K

   • Property Tax (Joint): $13K

[ThomasM125]

You do have to split your income and  tax withholdings since you are in community property state.

The way TurboTax handles this is after you enter your income and deductions, you will be asked to enter adjustments to reduce your reported amounts to the correct amount based on community property rules.

So, enter all of your tax items as you normally would for a return filed separately, and then you will see screens asking you to adjust those entries.