This client came in around April 15th and was going to file married filing jointly. There were some issues, so we had to file and extension. WIth the extension the client paid the tax due that we thought would be due. However now they are getting a divorce and the wife wants to file her 2006 taxes separate from her husband. WHere will the credit for the extension be applied to the husband or the wife? The wife is the actual taxpayer? Do they need to file a MFJ tax Return or can we take half of the payment and apply to wife and the other half to the husband. Thanks for your Help
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Mfs
There are too many unknowns to answer your questions. Be careful and don't get yourself in the middle. Research circular 230. You can prepare both types of returns mfj and mfs. See which one benefits both tax payers. It is up to them to decide how to proceed. If they were married as of December 31, 2006 it will likely be to their advantage to file mfj. I had a client in the same situation and filing mfs would cost him an additional 6.000. Needless to say he filed mfj for that year.
As far as tax already paid if they want to split it then ask the IRS. -
Tax payments made by filing an extension, and those made through estimated taxes are basically the same thing, although they are reported on different lines on the 1040. The principal is the same for both.
The 1040 instructions for estimated taxes are as follows"
If you and your spouse paid joint estimated
tax but are now filing separate income
tax returns, you can divide the
amount paid in any way you choose as long
as you both agree. If you cannot agree, you
must divide the payments in proportion to
each spouse’s individual tax as shown on
your separate returns for 2006. For an example
of how to do this, see Pub. 505. Be
sure to show both social security numbers
(SSNs) in the space provided on the separate
returns.
Divorced Taxpayers
If you got divorced in 2006 and you made
joint estimated tax payments with your former
spouse, enter your former spouse's
SSN in the space provided on the front of
form 1040. If you were divorced and remarried
in 2006, enter your present
spouse’s SSN in the space provided on the
front of Form 1040. Also, under the headgroup-
ing Payments to the left of line 65, enter
your former spouse’s SSN, followed by
“DIV.”Comment
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