Level 2

Splitting Wages In Year of Divorce Community Property State

Forum|Forum|4 years ago
February 15, 2022
2 replies
8 views

I am filing two returns as Single as my clients divorced in May of 2021. However, we live in WI which is a community property state. How do I file to split the wages from January to May in half between the ex-spouses? Is there a form or correct way to do this in Lacerte?

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sjrcpa

Level 15

Form 8958.

Work up your numbers on a spreadsheet first and then input.

The more I know the more I don’t know.

B

bkomorowskiAuthor

Level 2

The clients have to file as Single as that was their status at the end of the year. The 8958 is only for spouses or domestic partners. Lacerte won't let me use that unless filing Married Filing Separately.

BobKamman

Level 15

Apparently Wisconsin, a newcomer to community property, is still backwards in figuring out how to avoid these problems. In other states, the community ends when the divorce petition is filed, which probably would have avoided the situation here.

If anything goes wrong with either return, you're the one who will be blamed. That's why I usually tell both spouses to go find another preparer. Even if you do the split correctly, don't expect IRS to follow it. My happily-married clients who filed MFS last year to qualify for the unemployment exclusion, are still dealing with it. (It saves $4,000.) Wife's return was processed but she was not given credit for half the husband's withholding. Husband's return is still being processed.

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