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MFS Return for CA - Drake Software

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    MFS Return for CA - Drake Software

    I am working on a individual return that is MFS. In CA, which is a community property state, the income for both spouses needs to be split while the couple lived together. So, couple splits in August of 2015 so income/withholdings need to be split from January through August. I have figured out how to manipulate the federal return to correctly show the taxable wages and withholding, but I cannot figure out how to adjust the CA withholding to account for the portion of withholding that needs to be applied to wife in the Drake software without changing on W-2. I have called Drake support but the person I spoke with doesn't have a clue. Has anyone dealt with this in Drake and can give me some pointers?

    Much appreciated.

    Peggy Sioux

    #2
    Originally posted by peggysioux View Post
    I am working on a individual return that is MFS. In CA, which is a community property state, the income for both spouses needs to be split while the couple lived together. So, couple splits in August of 2015 so income/withholdings need to be split from January through August. I have figured out how to manipulate the federal return to correctly show the taxable wages and withholding, but I cannot figure out how to adjust the CA withholding to account for the portion of withholding that needs to be applied to wife in the Drake software without changing on W-2. I have called Drake support but the person I spoke with doesn't have a clue. Has anyone dealt with this in Drake and can give me some pointers?

    Much appreciated.

    Peggy Sioux
    If you are a Drake user please post this question in the Drake forum. There are many experienced users who practice in CA that may walk you how to do it.
    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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      #3
      Originally posted by ATSMAN View Post
      If you are a Drake user please post this question in the Drake forum. There are many experienced users who practice in CA that may walk you how to do it.
      I was unable to access the Drake forum this morning. But Drake support advised me that there is no where in software to make the adjustment unless I make the adjustment on the W-2. How do other tax preparers handled?

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        #4
        I override the lines on the 1040. I've never seen specific guidance for it in IRS instructions, but there's a lot of MEF business rules that only make sense if the adjustment is done on the 1040. For W-2 wages for example, FW2-001-01

        The sum of all Form W-2s Line 1 'WagesAmt' must not be greater than the sum of [Form 1040, Line 7 'WagesSalariesAndTipsAmt' and (sum of all Schedule C (Form 1040), Line 1 'TotalGrossReceiptsAmt' when Line 1 checkbox 'StatutoryEmployeeFromW2Ind' is checked) and (sum of all Schedule C-EZ (Form 1040), Line 1 'TotalGrossReceiptsAmt' when Line 1 checkbox 'StatutoryEmployeeFromW2Ind' is checked)] unless Form 8958 or Form 8839 is present in the return. When evaluating this, a tolerance of $5.00 is allowed.


        And F1040-034-04 for the withholding.

        Form 1040, Line 64 'WithholdingTaxAmt' must be equal to the sum of the following: [(1) all 'WithholdingAmt' for which 'WithholdingCd' has the value 'FORM 1099' in [OtherWithholdingStatement] attached to Form 1040, Line 64 and (2) all of the Forms W-2, Line 2 'WithholdingAmt' and (3) all of the Forms W-2G, Line 2 'FederalIncomeTaxWithheldAmt' and (4) Form 8959, Line 24 'AddlMedcrRRTTaxWithholdingAmt' and (5) 'TotalAmt' from [BackupWhSchedulesK1Statement]] unless Form 8958 is present in the return. When evaluating this, a tolerance of $5.00 is allowed.

        I see no reason for the IRS to have the exception in there for the 8958 unless they're expecting to see the W-2 showing different amounts than what's on the 1040. Thus my reason for adjusting it on the 1040 form.

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