Filing status

[Bird Legs]

Client, living in community property state, everything 50%-50%. Husband has income
of $80,000. and wife $66,000. They have 2 children, 6 & 7 years old.
Other income consists of Interest $260. and capital loss $25.
Itemized deductions total $12800. limited to $12,650. because of income.
Can they each file their own tax return filing as HOH, and each claim 1 child as a
dependent?
Of course the income would be divided equally between the 2. same with the itemized deductions.
Any comments are welcome.

[Brian EA]

Client, living in community property state, everything 50%-50%. Husband has income
of $80,000. and wife $66,000. They have 2 children, 6 & 7 years old.
Other income consists of Interest $260. and capital loss $25.
Itemized deductions total $12800. limited to $12,650. because of income.
Can they each file their own tax return filing as HOH, and each claim 1 child as a
dependent?
Of course the income would be divided equally between the 2. same with the itemized deductions.
Any comments are welcome.

Only one HOH per home. They were not separated during the year. They can however , file MFS

[Jesse]

HOH not an option

Community property state or not - if married and not seperate households for more than the last 6 months out of the year only have 2 choices - MFJ or MFS.

[Suzanne]

Do the return MFS and MFJ, bet they see that MFS costs them more in Federal tax, I would encourage MFJ return, even seperate they won't qualify for EIC, and seperate they won't have the itemzed to take.

[JJ EA]

Child Tax Credit

It looks like they phase-out of the child tax credit filing MFJ. I always try MFS in my tax software "optimization of MFS or MFJ" and put both children on one parent's return. If the income between the 2 is pretty equal that sometimes results in a bigger refund overall.

[Gary]

Divide income by 2

In a community property state, if the two married people file MFS, they must each report half of their total income. Thus, each would report ($80000+$66000)/2 0r $73000 on their respective returns. Also, if one itemizes, the other must also itemize and cannot take the standard deduction. Also, any child care expenses are not allowed.

Gary