MFJ MFS comparison

[Strongsilence-CPA]

I want to calculate taxes under MFS and MFJ.  And I need to allocate pension distributions 50/50 but the Comparison worksheet allocates them as designated by the input. IS there an override or input I need to make?

Each spouse participant has lived in CA while being married and while participating in his/her respective pension.  There it should be 50/50

[Karl]

There's an input box on Screen 3 to apply community property rules.  Put a 1 or a 2 in there for whichever one is "yes."

You can also change the default for this in settings>options.  Mine defaults on since I'm in CA.

[Strongsilence-CPA]

Karl,

That didn't specifically give the IRA/pension distribution to the correct taxpayer. Still 50/50.

Thank you anyways.

[Karl]

Thank you for responding and pointing this out.  I have a little more headspace to think through this today.  Ran this on a test return in my software and I see what you're saying more clearly now.

I am pretty certain there's no override/setting in Lacerte to get this right.

The only way I could get it right is to manually adjust the MFS returns on screen 13.1 and 3.1 after splitting.

But that doesn't help you for evaluating the MFJ/MFS from your software.  I'd create a duplicate return (so you don't accidentally file this way if you stay MFJ), and manually split the 1099-R in two, and enter the second half for the non-pensioned spouse.  That should at least give you good data to see if you want to split the return (and if MFS is better, I'd split this new test one rather than the orig, so more of your data entry is done for you).

Finally, if it were me and MFS is better, I'd 8275 this if you do MFS just to help avoid any kind of a notice for them automatically reclassifying this.

Hope that helps.