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Screen ComPSt - Community Property State Allocation (1040)
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Overview
Use this screen to enter information used to complete Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States, which is required for married filing separate (MFS) individuals or registered domestic partners residing in a community property state. Form 8958 is completed for paper returns, and is included in the electronic file for returns filed electronically. This screen can only be accessed for married filing separate (MFS) returns residing in community property states (AZ, CA, ID, LA, NM, NV, TX, WA, and WI), or if filing single or head of household and residing in CA, NV or WA. Recreate the electronic file any time the amounts in this screen are changed.
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Electronic filing note:
The IRS rejects a federal electronic file if Form 8958 is not completed for married filing separate returns residing in a community property state.Form 8958 - Allocation of Tax Amounts
Use this section to enter information necessary to complete Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States, which is required to report the allocation of tax amounts between married filing separate spouses or registered domestic partners (RDPs) with community property rights. Form 8958 is automatically included in the federal electronic file when filing electronically.
For flexibility, the application provides three methods for completing Form 8958.
- For joint returns, the Filing Status Optimization utility may be used to complete Form 8958. When a filing status optimization is performed, the program automatically completes data-entry in this screen for both individual returns based on information entered in the joint return (or "mock" joint federal return for registered domestic partners/same-sex spouses).
- For individual returns, after the return is complete and calculated via a print preview, mark theTransfer return informationbox. Similar to the option described above, the application automatically completes data-entry in this screen based on information entered in the individual return. After this step is complete, the spouse/RDP #2 allocation amounts may be completed by entering data in the fields provided in this screen.
- Alternatively, if neither of the methods above is utilized, all data entry for Form 8958 may be completed directly on this screen.
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- After the information on this screen is initially created via the Filing Status Optimization process or via theTransfer return informationbox, any subsequent data entry done inside the individual returns will not automatically be reflected on Form 8958. Therefore, it is extremely important to review Form 8958 for completeness prior to filing. The best way to ensure accurate reporting is to make sure all return information is complete prior to either running a Filing Status Optimization, or marking theTransfer return informationbox.
- Certain items, such as wages, interest, and dividends are reported on a per-payer basis as required by the Form 8958 instructions. However, other items such as capital gains/losses, other gains/losses, other income, and various itemized deductions are summarized.
- Pension income, IRA distributions, and Social Security benefits are reported based on the taxable amount included on the return. To include additional detail for the nontaxable amounts, use the statements in this screen to enter the additional allocation information.
Domestic partner return in CA, NV, or WA
Enter
X
in this field to indicate the community property allocation is being completed for a registered domestic partner residing in CA, NV, or WA.Community property state (Force)
If the taxpayer/RDP #1 or spouse/RDP #2 resided in a community property state other than the postal code entered in the 1040 screen (for example, if the individual lived in more than one state during the tax year), use this field to indicate the community property state in which the individual resided.
Spouse/RDP #2 first and last name
The application automatically prints the spouse/RDP #2 first and last names entered on the 1040 screen at the top of Form 8958. If the spouse/RDP #2 first and last name differ from the information entered on the 1040 screen, or the spouse/RDP #2 name is not included on the 1040 screen (i.e. for single/head of household domestic partner returns), enter the first and last name of the spouse/RDP #2 in these fields.
Spouse/RDP #2 SSN
The application automatically prints the spouse/RDP #2 SSN entered on the 1040 screen at the top of the Form 8958. If the spouse/RDP #2 SSN differs from the information entered on the 1040 screen, or the spouse/RDP #2 SSN is not included on the 1040 screen (i.e. for single/head of household domestic partner returns), enter the social security number of the spouse/RDP #2 in this field.
Transfer return information
After completing all other data entry for the current client and calculating the return via print preview, immediately enter X in this field to transfer the calculated return information to the Taxpayer's/RDP #1's Allocation fields.
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If a filing status optimization was performed on the joint client, this field will be marked automatically after the optimization is completed.
Unmarking and subsequently re-marking this box after data entry is completed for the Spouse/RDP #2 will clear all of the data entry in the
Spouse's/RDP #2's Allocation
column.Taxpayer's/RDP #1's Allocation
Enter the applicable community and/or separate amounts for the taxpayer/RDP #1 in this column. This information displays in column B (Allocated to Spouse or RDP) of Form 8958.
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If the married filing separate (MFS) or single/head of household registered domestic partner return is created via the Filing Status Optimization Utility using the
Split income according to Community Property rules
option, the application automatically completes the Taxpayer's/RDP #1's Allocation
column based on information entered in the joint return.Spouse's/RDP #2's Return
Enter the applicable community and/or separate amount(s) for the spouse/RDP #2 in this column. The application uses this information to complete column C (Allocated to Spouse or RDP) of Form 8958.
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- If the married filing separate (MFS) or single/head of household registered domestic partner return is created via the Filing Status Optimization using theSplit income according to Community Property rulesoption, theSpouse/RDP #2's Allocationcolumn completes automatically based on information in the joint return.
- To satisfy IRS e-file requirements for MFS or registered domestic partner individuals residing in a community property state, the spouse/RDP #2 information must be entered on the ComPSt screen.