Ca Mfs

[dsi]

CA is a community property state. When preparing a MFS return for a coup who lived together all year, can I put all of HIS W2 income on his return, and all of HER sch C income on her return?

They have always maintained seperate bank accounts, never co-mingling of $$$. They actually live like they are not married.

[jainen]

the way I do it

>>can I put all of HIS W2 income on his return, and all of HER sch C income on her return?<<

That's the way I do it. It keeps things nice and clean and the clients can understand what they are signing. Of course, then you have to make up a little chart or worksheet to split the income and include the adjustment for community property on Line 21 (positive on one return, negative on the other).

(I have to admit, that's not officially the right way. The IRS says you are supposed to divide everything directly on lines 7, 12, etc.)

I have one client who showed me a post-nup agreement that designates all income as separate. Not being a lawyer, I took that at face value and don't split their income (her husband is not my client).