Discussion:Married Filing Separately & Community Property State

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Discussion Forum Index --> Advanced Tax Questions --> Married Filing Separately & Community Property State
Discussion Forum Index --> Tax Questions --> Married Filing Separately & Community Property State

Karendhill (talk|edits) said:

10 April 2009

New client wants to file married separately, as he has in past years. AZ is a community property state. From what I have researched, with MFS, the itemized deductions or standard deduction is split 50/50 on the federal return. Both spouses must file the same - either standard deduction or itemized deductions. On the AZ return, the income is split 50/50 as well as the itemized deductions. Client says that he has never bothered with splitting deductions or income in the past. The wife is out of the country temporarily and evidently he can't contact her to find out anything about her income and deductions. What should I do? Has anyone else dealt with this situation before?

TTMM (talk\|edits) said:	11 April 2009
See ITR 93-22. Arizona will allow separate returns if the taxpayer's qualify under IRC 66.

Riley2 (talk\|edits) said:	11 April 2009
Any deductions paid out of community funds should be split 50-50. Any community income should be split 50-50.

Karendhill (talk|edits) said:

11 April 2009

Schedule c income and w-2 income are both community income, correct? Well, client has no idea what his wife made last year and apparently she is in Outer Mongolia somewhere hanging off the side of a mountain and can't be reached. So, we either file an extension and hope that she returns home before October 15th, or just report his income on the returns and split the standard deduction 50/50. I vote for the latter.

Outwesttax (talk|edits) said:

11 April 2009

Well, because state by state rules vary. I'd start with what the AZDOR says:

http://www.azdor.gov/FAQS/Married%20taxpayers%20community%20property%20internet.pdf

Bet you'll find your answer and something to show the taxpayer. (so they know you are not making this up)

Outwesttax (talk|edits) said:

11 April 2009

Any here are a couple of those documents:

http://www.revenue.state.az.us/ResearchStats/rulings/itr93-18.htm

http://www.revenue.state.az.us/ResearchStats/rulings/itr93-20.htm