Couple lives in CA and will file MFS. One spouse has a Schedule C loss. Does this get split 50-50?
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If they lived together for the entire year, then each spouse will get 1/2 of the community income, which includes the Schedule C. The best way to do a community split is spreadsheet all the income, showing total income by category, and then split for spouse #1 and spouse #2. Put all the income on the return and then on line 21 put your adjustment for community income
You do not split the SE tax, if any. That will go with whoever the earning spouse is.
Maribeth -
Actually, if they live together at any time during the year, the split is required.Originally posted by Maribeth View PostComment
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That is correct. The split is required for whatever period the community estate continues. . My assumption from the OP's questions was that the taxpayers lived together throughout 2008 and for some reason were going to file MFS. In that case, all of the 2008 income would be split between the two.Originally posted by solomon View Post
If the taxpayers separated during 2008, then only the portion of income earned up to the date of separation would be community income and would be split. Income earned after that date would be separate income and taxed to the earning spouse.
State laws regarding what is community property and what is community income differ; I can only speak as to the laws of my State of Washington.
MaribethComment
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Community withholding
Don't forget to split the withholding. It does not belong to the one that has the W-2.Jiggers, EAComment
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