MFS - Filling out Form 8958 for Married Filing Separately - Income Allocation Help
My wife and I decided to file taxes separately this year, and now I'm getting confused with Form 8958. The tax software I'm using automatically added this form to my return. We have different income levels, and I'm choosing MFS primarily because of my significant medical expenses and some other compensation issues that make it beneficial. The form shows two columns (one with my name and one with my wife's) and then rows listing income sources: Company A with a blank box, Company B with another blank box, and other Compensation with yet another blank box. I'm confused about how to actually complete this. Am I supposed to fill in the blank boxes in my wife's column with half of my income from each source listed in my column? This is my first time filing separately from my wife, so any guidance would be appreciated. Let me know if you need additional details about our situation to help clarify.
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Fidel Carson
The Form 8958 (Allocation of Tax Amounts Between Certain Individuals in Community Property States) is only needed if you live in a community property state. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you live in one of these states, then yes - you generally need to split community income 50/50 between spouses, even when filing separately. You'd list your total income from each source, then allocate half to each spouse in most cases. However, if you don't live in a community property state, you typically wouldn't need this form at all. When filing separately in non-community property states, each spouse simply reports their own income on their own return. The software might be requiring this form because it thinks you're in a community property state. Check your state settings in the software.
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Isaiah Sanders
•Does this mean if I live in Texas and my wife has no income but I make $100k, I still have to split that 50/50 on paper even though it's all MY income that I earned? That seems weird.
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Fidel Carson
•Yes, that's exactly what it means in community property states like Texas. Even if only one spouse earns income, that income is legally considered to belong equally to both spouses. So in your example, you would each report $50k of that income on your separate returns. This is one reason why Married Filing Separately often doesn't provide tax benefits in community property states - you're splitting the income but losing various tax benefits that come with filing jointly. There are exceptions and certain income types might be considered separate property, but the general rule is 50/50 splitting of community income.
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Xan Dae
I went through this exact headache last year with my taxes! Tax software can be really confusing with these specialized forms. After hours of frustration, I found taxr.ai (https://taxr.ai) and it saved me so much time understanding these allocation forms. You upload your documents and it analyzes them to tell you exactly what goes where. For the Form 8958 specifically, it clarified that I only needed to include my spouse's portion of community property income - not everything. It also told me which of my income sources qualified as community property vs. separate property, which my regular software completely missed.
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Fiona Gallagher
•How does it work with state-specific rules? Like does it know the difference between community property states vs others? My wife and I moved mid-year from Washington to Colorado and I'm totally lost on how to handle splitting things.
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Thais Soares
•I'm skeptical... does it actually file for you or just tell you what to put in your regular software? Don't want to waste time with something that just gives general advice when I need actual numbers.
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Xan Dae
•It absolutely handles state-specific rules - that's actually one of its strengths. For situations like yours with a mid-year move from a community property state to a non-community property state, it can determine which income needs to be split and which doesn't based on when you earned it. This was a huge help for me with a similar situation. It doesn't file for you - it analyzes your documents and gives you specific guidance with the actual numbers to enter in your regular tax software. It's not general advice - it's personalized to your exact situation with the precise figures you need to enter on each line of forms like the 8958.
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Fiona Gallagher
Wow I actually tried taxr.ai after asking that question and I'm blown away. It walked me through exactly how to handle my mid-year move situation with Form 8958. Turns out I only needed to split the income I earned while living in Washington (community property state), not what I earned after moving to Colorado! It literally showed me the exact amounts to put in each box on the form and explained why. My regular tax software was trying to make me split ALL my income 50/50 which would have really messed up my return. Definitely recommend for anyone dealing with these complicated MFS situations!
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Nalani Liu
If you're trying to reach the IRS to ask about Form 8958, good luck getting through to a human! I spent DAYS trying to get specific guidance when I was in this exact situation. Finally found Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent explained that Form 8958 is only for community property states, and walked me through exactly how to allocate our income correctly. Was totally worth it because the agent confirmed I was doing it right, which saved me from a potential audit. They were even able to check my previous year's return while I was on the call to confirm everything was consistent.
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Axel Bourke
•Wait, so this service just gets you through to the IRS faster? How does that even work? The IRS phone system is notoriously impossible to navigate.
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Aidan Percy
•This sounds like BS. The IRS doesn't take calls about how to fill out forms - they always just tell you to read the instructions or talk to a tax professional. No way they walked you through filling it out.
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Nalani Liu
•It uses a combination of technology and their knowledge of the IRS phone system to navigate the complicated menus and hold times for you. When a representative becomes available, your phone actually rings and connects you directly to them. It's not magic - just smart use of technology to handle the painful waiting part. The IRS absolutely does provide guidance on forms, though they won't prepare your return for you. In my case, the agent clarified specific questions about Form 8958 that weren't clear in the instructions. They won't fill it out line by line, but they will answer specific questions about what belongs where if you're confused about the instructions, especially for less common forms like 8958.
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Aidan Percy
I stand corrected about Claimyr. I was skeptical so I tried it today after posting that comment, and I actually got through to an IRS agent in about 15 minutes. The agent was super helpful about my Form 8958 questions - confirmed that since I live in Florida (not a community property state), I don't need Form 8958 at all and should override the software to remove it. The agent said tax software often gets confused about this form, especially if you enter "married filing separately" without specifying your state clearly. Would have spent hours more banging my head against the wall without this clarification. Never thought I'd say this, but talking to the IRS directly solved my problem!
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Fernanda Marquez
Something else to consider - Form 8958 is for allocating income between spouses in community property states, but there are exceptions to the 50/50 split rule. Certain types of income might be considered separate property, not community property. For example, if you received an inheritance, gifts specifically to you, or owned property before marriage, that might be separate property. Also, if you have a valid pre-nuptial agreement that defines certain income as separate, that could change how you fill out this form.
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Norman Fraser
•Do you know how disability payments work with this form? I get VA disability which I thought wasn't taxable anyway, but the software is asking me to include it on this form and I'm confused why.
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Fernanda Marquez
•VA disability payments are generally not taxable, so they typically wouldn't need to be included on tax forms related to income allocation. This sounds like an error in the software. The software might be asking you to list all sources of income initially, but then it should recognize that VA disability is non-taxable and exclude it from tax calculations. I'd recommend indicating that it's VA disability specifically when entering it, as most tax programs have special categories for this type of income that will handle it correctly.
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Kendrick Webb
Quick tip: the instructions for Form 8958 on the IRS website are actually pretty good. Here's what they say about filling out the columns: "For each line, the amounts in columns (a) and (b) should add up to the combined amount reported on both spouses' returns." So if you earned $80,000 from Company A and it's community income in a community property state, you'd report $40,000 in your column and $40,000 in your spouse's column. Each of you would then report your respective amounts on your separate returns.
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Hattie Carson
•The instructions never make sense to me lol. So if we have separate companies we work for do I still need to do this form? I make 70k from my job and she makes 55k from hers. We live in California.
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