Please follow these steps below to accurately report your Community Income:
- Gather both your and your spouse’s W-2’s and any other community income for preparation.
- Create an entry into our program for each of the W-2's for both you and your spouse's community income. Example: you should have an entry for each of your W-2 form(s) and for each of your spouse's W-2 form(s) under your name.
- You will be required to claim half of the total income and half the total federal tax withholdings for each W-2 on your return. Change the amount in Box 1 to reflect one-half of the total community income for wages. Change the amount in Box 2 to reflect one-half of the total federal tax withholdings. If the W-2s are originally the spouse's W-2s, leave boxes 3-6 blank. If the W-2 is issued to you, report boxes 3-6 as it was reported on your W-2.
- If you have any other community income besides your W-2’s, please change those amounts to reflect your new community income, one-half of the income.
- Once you have completed the steps above, please complete the Married Filing Separately Allocations Form 8958. This form will explain to the IRS why the taxable income and withholdings listed on the W-2 and other income are listed differently than the original forms.
If you do not live with your spouse, you may not be required to file form 8958. You may be able to disregard the community property laws if:
- You do not file a joint return for the current year
- You do not include community income in your gross income
- Spouse's wages, salaries, etc for work performed as an employee
- Spouse's income earned as a sole proprietor
- Spouse's share of partnership income
- Spouse's income from separate property
- Spouse's separate income
- You do not have knowledge of the spouse's community income
- It would not be fair to include the income on your return
To complete the form, please go to:
- Federal Section
- Miscellaneous Forms
- Married Filing Separately Allocations Form 8958 - Enter your spouse’s half of the community income within the applicable fields.
Please refer to Pub 555 for more information.