My wife and I are filing separately and some of our accounts are held jointly. How do we declare the dividends and interest separately? Do we split the amount in half?Many thanks in advance for any replies.
<My wife and I are filing separately and some of our accounts are held jointly. How do we declare the dividends and interest separately? Do we split the amount in half?>It depends on whether you live in a community property or common law state. Community property states include: Louisiana, Texas, Mexico, Arizona, CA, Washington, Idaho, Nevada, and Wisconsin. If you live in one of these states all property is deemed to belong to the marital community and should be treated as if one-half of the income is earned by each spouse. If the property (stocks, land, etc.) was acquired before the marriage or recieved by gift or inheritance following the marriage, it may be claimed seperatly by each spouse. If you live in a common law state seperate property produces seperate income, and each person is taxed only on their property.SBT1
[[My wife and I are filing separately and some of our accounts are held jointly. How do we declare the dividends and interest separately? Do we split the amount in half?]]Generally speaking, yes. You would each report half of the earnings of the account if they are held jointly. But the married/separate filing is one of the most MISunderstood filings, and virtually all of the married/separate filings done by the taxpayer themselves are incorrect. The rules are different for people living in a community property state vs. a separate property state. You might want to check out IRS Publications 504 and 555 at the IRS web site for some additional information, ESPECIALLY if you live in a community property state.TMF TaxesRoySPECIAL NOTE: Remember that this response is not the "last word" on your situation. It is really only a starting point. Make sure to review the "Read This First" post(http://www.fool.com/School/Taxes/TaxesDisclaimer.htm) for additional information. In addition, many of your questions may already be referenced in the Taxes Frequently Asked Questions area. In order to visit the Taxes FAQ area, go to the Fool's School area (http://www.fool.com/school.htm) and check out "Other Features" in the list box, OR you can jump directly to the Taxes FAQ area (http://www.fool.com/school/taxes/taxes.htm). Additionally, if any references were made to the IRS Web Site, you can get there by pointing your web browser to (http://www.irs.ustreas.gov).
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