MFS Return for CA - Drake Software

[peggysioux]

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

[ATSMAN]

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.

[peggysioux]

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?

[David1980]

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.