Once I have determined the allocation of community property, do I just change the income such as wages & tax withheld to the correct portion? These amounts will not be the same as the W2 & I would imagine an IRS notice would be generated.
Solved! Go to Solution.
Ok... I've filled out Form 8958, allocating the income & withholding pieces to each spouse on both their MFS returns, but it has no impact on the income/withholdings that show on the face of the 1040. Wages & taxes are showing as they were reported/entered on the W-2, NOT by how they're allocated on Form 8958.
Is there a toggle to activate Form 8958? Do I have to adjust the W-2's to correctly allocate the 50% to each spouse?
That's a "dumb" but necessary form. Numbers there don't flow anywhere. You will need to manually split the return.
Still an AllStar
Ah, ok, that makes sense.
So, I need to split out everything manually, which I have mostly done. I'm struggling with the W-2's, though. Splitting wages & federal income taxes is easy enough, but what about SS & medicare wages/taxes? What about all the items in Box 12? Am I splitting all of that as well?
Also, to get the income of the spouse 1 onto spouse 2's return, I'll be entering that 1/2 W-2 there, even though spouse 1 never worked there?
Thanks, this helps immensely!
You need to split just box 1 & 2 and state wages & withholding. Enter half of the spouses W2 but do not indicate it's the spouse's.
If you have other items like interest, change amount.
If you have self employed spouse, it gets more interesting.
I may have spoke too soon... What about items that impact additional medicare tax? when I split out the income between spouses, both will have to file Form 8959. I'm guessing I split box 5 50/50 between them as well, so that the additional medicare taxes will calculate for both spouses?