Hello again. I am trying to reduce a horrendous tax bite caused by a long term capital gain. The K-1 for the transaction reporting the gain is in my name only. My other income (W2 and Social Security) is considerably less than my wife's, approximately 1/6. We have no joint accounts, other than our mortgage and local property taxes (which exceed the standard deduction for married filing jointly). We have no carryover losses from previous years.
I have already completed a Married Filing Jointly return in Turbotax and just ran the What-If Worksheet. In the Married Filing Separately (MFS) columns, the Worksheet splits the capital gain evenly between my wife and I. Again, the K-1 (form 1065) for that gain is in my name only and results from an investment made prior to our marriage. The Worksheet does the same for interest income -- splits it 50/50 -- although most of it is from accounts in my name only. That doesn't seem right.
Also, line 72 of the Worksheet shows negative numbers. According to the TurboTax website, negative numbers indicate a refund. That is definitely not right in our case.
Bottom line: If the Worksheet calculations are off, do I need to start from scratch and create 2 new returns in Turbotax? Can I import data from last year's return (married filing jointly)?
I know it's a lot to ask, but help would be greatly appreciated.
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You would need to create two separate returns. You could start with the current year version of last year's married-joint return, but it may be easier to just start from scratch as it may be difficult to adjust the married-filing joint return to a married-filing seperate one.
You would need to create two separate returns. You could start with the current year version of last year's married-joint return, but it may be easier to just start from scratch as it may be difficult to adjust the married-filing joint return to a married-filing seperate one.
I took the time to create 2 new returns, one for my wife, one for me, each Married Filing Separately. After entering W2 and SS income and, on my return, the capital gain, the answer was clear. In our situation, which seemed like it might have been the rare exception to the rule, MFJ still beat MFS by quite a bit. Unless I'm missing something important, we'll just have to bite the bullet this year. Consider the question answered, and thank you for your help!
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