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user987385
Level 2

My spouse and I are married, filing separately, with joint bank accounts

My spouse and I are married, filing separately, and no dependents. We live in California (Community property state). We have 3 accounts with 1099 INTs. How do we split reporting 1099 INT? Can I file two (2) interest 1099s on my return and my spouse reports one? 

1 Best answer

Accepted Solutions
DawnC0
Intuit Alumni

My spouse and I are married, filing separately, with joint bank accounts

Dividends, interest, and rents from community property are community income and must be evenly split.  You both should report half of each 1099-INT.  IRS Publication 555 Community Property

Depending on how complex your overall tax situation is, you may want to read this article regarding filing separately in community property states.  Married filing separately in community property states.

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10 Replies
DawnC0
Intuit Alumni

My spouse and I are married, filing separately, with joint bank accounts

Dividends, interest, and rents from community property are community income and must be evenly split.  You both should report half of each 1099-INT.  IRS Publication 555 Community Property

Depending on how complex your overall tax situation is, you may want to read this article regarding filing separately in community property states.  Married filing separately in community property states.

user987385
Level 2

My spouse and I are married, filing separately, with joint bank accounts

What about W2 income.  My spouse and I both have separate W-2 incomes.  Do those W-2s must be evenly split too? or I report it on my own separate tax and my spouse report it on his/her tax?  Thank you
DawnC0
Intuit Alumni

My spouse and I are married, filing separately, with joint bank accounts

Yes, wages and salaries (earned in CA) are considered community income and must be split.  
user987385
Level 2

My spouse and I are married, filing separately, with joint bank accounts

One last question - Does Turbo Tax takes care of the splitting W-2 incomes, dividends or interests automatically when I file Married separate?  Thank you!!
DawnC0
Intuit Alumni

My spouse and I are married, filing separately, with joint bank accounts

TurboTax has allocation screens and a worksheet to assist you in entering any adjustments your community property state may require when filing separately.   For instructions, see this link.  

DawnC0
Intuit Alumni

My spouse and I are married, filing separately, with joint bank accounts

VolvoGirl
Level 15

My spouse and I are married, filing separately, with joint bank accounts

May I ask Why do you want to file separately?  
Joint is usually better.  Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  

And there are several credits you can't take when filing separately, like the
EITC Earned Income Tax Credit
Child Care Credit
Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….
https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately
user987385
Level 2

My spouse and I are married, filing separately, with joint bank accounts

I was thinking of filing separate this year because my spouse's salary is 10K/year lower than my salary, we have no dependents and can not take any credits (EITC Earned Income Tax Credit, Child Care Credit,
Educational Deductions and Credits).  I thought filing separate would reduce some of our taxes.
user987385
Level 2

My spouse and I are married, filing separately, with joint bank accounts

I was thinking of filing separate this year because my spouse's salary is 10K/year lower than my salary, we have no dependents and can not take any credits (EITC Earned Income Tax Credit, Child Care Credit,
Educational Deductions and Credits).  I thought filing separate would reduce some of our taxes.
VolvoGirl
Level 15

My spouse and I are married, filing separately, with joint bank accounts

No, filing MFS usually makes you owe more.
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