Separate residences, 2 community property states, one state has no state income tax. How to file?

Forum|Forum|7 years ago
June 6, 2019
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I live and work in WA. WA is a community property state and has no state income tax. My husband lives and works in ID, also a community property state. I have a WA driver's license and I vote in WA. My husband is the same for ID. He had minimal income in 2016. Can we/ should we file married, filing separately? But do our federal taxes as married filing jointly? HELP!

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Best answer by TomD8

Idaho requires that you use the same filing status on your Idaho return that you use on your federal return. See page 4 of this reference: https://tax.idaho.gov/forms/EIN00046_12-12-2016.pdf

For most married couples, it is advantageous to file jointly rather than separately, especially when community property states are involved. This previous TT answer helps explain that: https://ttlc.intuit.com/questions/3462171-should-i-file-married-jointly-or-married-separately

Your likely best bet to file a joint federal and therefore a joint Idaho return.

T

TomD8Answer

Employee

Idaho requires that you use the same filing status on your Idaho return that you use on your federal return. See page 4 of this reference: https://tax.idaho.gov/forms/EIN00046_12-12-2016.pdf

For most married couples, it is advantageous to file jointly rather than separately, especially when community property states are involved. This previous TT answer helps explain that: https://ttlc.intuit.com/questions/3462171-should-i-file-married-jointly-or-married-separately

Your likely best bet to file a joint federal and therefore a joint Idaho return.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

N

NancyG

Employee

Married Filing Separately in Community Property States

Married filing separately in community property states

Filing taxes in community property states as married filing separately (MFS) can be complicated. Certain states have laws about community property defining how they expect MFS couples to share, or allocate, income.

Community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

TurboTax has allocation screens and a worksheet to assist you in entering any adjustments your community property state may require when filing separately. For more information, refer to IRS Publication 555 Community Property.

If you're using TurboTax Online, we recommend that you transfer your return to the TurboTax CD/Desktop version. You will save time by entering less information.

Begin by completing a MFS federal tax return for you and your spouse, as you'll need the amounts for different income categories, tax amounts, and all tax payments for each of you. If one of you plans to itemize deductions, the other person must itemize as well. Otherwise, you’ll both have to use the standard deduction.

You may not be able to e-file, in which case TurboTax will guide you through the steps to file a paper return.

Entering income adjustments for a community property state

Complete the community property worksheet

Finish your tax returns

Additional Resource:

Five Tax Tips for Community Property States