Switching Taxpayer and Spouse

[JOFI]

Does anyone know of any one step solution in ProSeries that allows you to switch the Taxpayer and Spouse such that everything gets switched at once -- all of the Taxpayer's W-2 forms are now the Spouse, and so forth?  Or do you just need to manually change everything?

Have a client who wishes to change up who is the Taxpayer and who is the Spouse this year and just trying to optimize my workflow.

[dascpa]

Sorry, you're out of luck.  It's a manual process.

[Just-Lisa-Now-]

Why are they changing places? Its really irrelevant whos listed first, and IRS would prefer you keep it one way, rather than switching just to avoid confusion.

[JOFI]

I agree it is irrelevant, but:

1) Married couples switch between filing Jointly and Separately in consecutive years, so merely switching Taxpayer and Spouse on a joint return is something the IRS can easily handle;

2) The client is requesting this because the husband typically makes estimated tax payments, and the IRS mishandled the payments last year because he is the Spouse on the return and his payments were made under his SSN, leading to threatening letters from the IRS on garnishing his wages because the IRS couldn't locate the payments (a situation that happened with multiple clients last year).  I completely understand his perspective here, and ultimately this is the call of the client.

[rbynaker]

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@JOFI wrote:

I agree it is irrelevant, but:

1) Married couples switch between filing Jointly and Separately in consecutive years, so merely switching Taxpayer and Spouse on a joint return is something the IRS can easily handle;

2) The client is requesting this because the husband typically makes estimated tax payments, and the IRS mishandled the payments last year because he is the Spouse on the return and his payments were made under his SSN, leading to threatening letters from the IRS on garnishing his wages because the IRS couldn't locate the payments (a situation that happened with multiple clients last year).  I completely understand his perspective here, and ultimately this is the call of the client.

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I think your #1 statement "something the IRS can easily handle" is directly contradicted by the reality of #2. 🙂  For whatever reason, the IRS has trouble now finding spousal money.  It's usually just a phone call to fix it (but that requires someone at the IRS to answer the phone.)

I normally don't do this but I would make an exception in this case.  I would advise the client that it's time consuming and prone to errors so there would be an additional $x charge.

One trick I learned this year for Drake that would probably apply for ProSeries.  Before you transfer from prior year, go mark the taxpayer deceased in prior year.  Then transfer and it should transfer all of the SP indicators to TP.  (I'd then go back and unmark them deceased in the 2020 file, just 'cause I don't like bad data floating around.)  That should at least do half the work for you.  The SP will become TP on the 2021 return so you only need to enter the former primary taxpayer's info.  Just a thought, may create as much work as it saves depending on how much data you have to enter.

Rick

[JOFI]

The takeaway here is that whoever is making estimated tax payments/extension tax payments under his/her SSN for a married couple should be the Primary Taxpayer on the return.  Switch it, and the IRS computers can't handle it for some reason.

Other than that, it doesn't matter if this switches from year to year, because the IRS is not using your prior year tax information to assess your current year filing/payments.  Otherwise, there would be mass confusion every time someone gets married, divorced, or a spouse dies.

[taxes96786]

IRS does not want this done. I had this issue with a client and the IRS said the primary should alway remain the primary when filing or they may start getting love letters from Uncle Sam.