I have a couple in Texas who have been separated for a few years - divorce will be finalized in 2021. They have lived apart for at least 2 years, but until this year they continued to file jointly. The wife qualifies as head of household (or at least she would in a non-community property state). Can she claim HOH in TX and ignore the community income? If she does, and the husband files MFS - what information goes on the Form 8958 for him? Any guidance would be appreciated or tell me if I should just tell them to find a TX preparer who knows the rules. Thanks!
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Per Pub 555, "In some states, the marital community ends when the spouses permanently separate, even if there is no formal agreement. Check your state law." I don't know about Texas specifically, but it may well be that the marital community already ended and there is no community income to allocate. You can file the Form 8958 showing his income all allocated to him, or maybe you don't even need to include it (the form).
"Can she claim HOH in TX?" Yes, I would say so, as long as she meets the critieria to be "considered unmarried", regardless of whether there is community income or not.Last edited by Rapid Robert; 01-22-2021, 08:02 PM."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard -
Based on the information in the post it sounds like they filed the 2019 MFJ and according to pub 555 that would disqualify them from treating the income separately.- You and your spouse lived apart all year.
- You and your spouse didn't file a joint return for a tax year beginning or ending in the calendar year.
- You and/or your spouse had earned income for the calendar year that is community income.
- You and your spouse haven't transferred, directly or indirectly, any of the earned income in condition (3) above between yourselves before the end of the year. Don't take into account transfers satisfying child support obligations or transfers of very small amounts or value.
If all these conditions are met, you and your spouse must report your community income as discussed next. https://www.irs.gov/publications/p55...link1000168805
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