One spouse filing MFS; the other HoH because of the kids. How (or where) should I input/override the allocated amounts for taxpayer after completing 8958?

Forum|Forum|1 year ago
March 5, 2025
2 replies
10 views

Couple was client who used to file MJF. They separated in 2024, so I did separate returns, then did 8958. Was this mistake?

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PhoebeRoberts

Intuit Community Champion

1) You have a conflict of interest handling both returns, and should get a written waiver.

2) They, with assistance from their attorneys, need to determine when the "community" ended. Everything prior to that date is split under the normal community property rules.

3) If they spent even a single night under the same roof after 6/30, that blows HoH.

D

dvisionsAuthor

Level 2

Couple assures me that the "split," but not a legal separation or divorce, occurred before June 30, 2024. I believe it is a conflict of interest and may consider advising one to go elsewhere. Until then, I am most confused about how to "change" the amounts determined on the 8958 into each of their respective actual tax returns, (Override option is grayed out). Would I perhaps adjust their income and deductions using Schedule 1 or do you modify W2 and 1099 information since it is my understanding that even taxes in each box have to be split evenly in Louisiana. Unbelievably, this is my first MFS return.

BobKamman

Level 15

Both of them were your clients for 2023, but now you're going to tell one of them, "sorry, I'm going to pretend you were never my client so I can tell myself I don't have a conflict of interest"? That's interesting. Let's say the one you keep turns out to have had $50,000 of unreported income in 2023. IRS comes after the spouse because it was a joint return. You're going to say, "sorry, you were my client then but you're not my client now?"

BobKamman

Level 15

What did you show on the 8958? State law varies, but generally the community ends when the divorce petition is filed. What date did you end the "split"?

And Tax Court cases have allowed separate households under the same roof. Both spouses could have spent a night under the same roof, with one (or sometimes both) still qualifying as "head of household." It's a question of facts and circumstances.

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