TurboTax support in the article How do I prepare a joint federal return and separate state returns explains how to file a federal return as MFJ while filing state returns as MFS.
After following those instructions, I still have three questions:
1. Allocating worldwide income to each spouse’s California MFS return
Normally the worldwide AGI from federal Form 1040 flows to California Form 540NR Line 13, then to Line 19 (after modifications), and eventually to Line 36 (California tax rate calculation). This means higher worldwide AGI on 1040 will trigger higher tax rate applied to California-sourced income.
Are the instructions really suggesting that I should on 540NR Line 13 use AGI from the mock federal MFS return (created by deleting the other spouse’s separate income)? Wouldn't this trigger immediate mismatch with the actually filed federal tax return?
Or, should worldwide income be allocated to state returns differently—for example, by using Form 8958, which TurboTax actually asked me to complete when I created mock federal MFS return from MFJ return?
2. Federal return to attach to 540NR
When mailing my California MFS return to the FTB, which federal return should be attached to 540NR:
the mock federal MFS return,
the authentic federal MFJ return, or
both?
3. California 540NR filing-status checkbox
On Form 540NR there’s a box "if your California filing status is different from your federal filing status, check the box here". While the instructions don’t mention it directly, I assume this must be checked in my case. However, TurboTax won’t keep the box marked even in Forms mode. Should I manually check it with a pen after printing the return?
Additional info: This is for 2024 tax return under extension. Both of us are Texas residents (a community property state). However, we have a proper separate property (and income) agreement. Only one of us have California sourced income.
