Sch-A MFJ vs MFS

[Vic Dura]

I'm curious about something. When a married couple chooses
to file MFS does the IRS require that entries to each
MFS/Sch-A be allocated in a particular way?

For example, consider mortgage interest for a jointly owned
personal residence. How is the interest allocated to each
MFS/Sch-A?

1) 50% to each

2) according to who actually wrote the check

3) however the couple wants to allocate as long as the total
for both together matches what would be on the MFJ/Sch-A

4) some other manner

Thanks for any comments.

 

[Rick Merrill]

I'm curious about something. When a married couple chooses
to file MFS does the IRS require that entries to each
MFS/Sch-A be allocated in a particular way?

For example, consider mortgage interest for a jointly owned
personal residence. How is the interest allocated to each
MFS/Sch-A?

1) 50% to each

2) according to who actually wrote the check

3) however the couple wants to allocate as long as the total
for both together matches what would be on the MFJ/Sch-A

4) some other manner

One approach is to have ALL deductibles of joint items go to
one individual so they itemize, while the other person takes
the standard deduction.

So I'd go for #3.

 

[A.G. Kalman]

I'm curious about something. When a married couple chooses
to file MFS does the IRS require that entries to each
MFS/Sch-A be allocated in a particular way?

For example, consider mortgage interest for a jointly owned
personal residence. How is the interest allocated to each
MFS/Sch-A?

1) 50% to each

2) according to who actually wrote the check

3) however the couple wants to allocate as long as the total
for both together matches what would be on the MFJ/Sch-A

4) some other manner

Thanks for any comments.

It's allocated based on who paid it. If the funds come out
of a joint account, then you split it 50-50. If the funds
come out of a separate acount, then the owner of that
account gets it all. If they live in a community property
state and all the assets are community property, then you
split it 50-50 regardless of how the account is titled.

 

[MTW]

Thanks for any comments.

As a general rule, the items would be allocated 50%-50% if
paid from "joint" funds, or 100% to the spouse paying them
with "separate" funds. In community property states, where
all funds acquired during the marriage are "presumed" to be
community (unless clearly proven otherwise), a 50%-50%
allocation typically applies.

That said, mortgage interest and real estate taxes might
represent special cases to the extent that the ratio of
payments applied differs from the ratio of ownership. For
example, where "joint" or "community" funds are used to pay
such expenses with respect to a property owned separately by
one spouse. In such cases, there might be a "gift" from the
non-owing spouse to the owning spouse, thereby allowing the
owning spouse to claim 100% of the deduction (and the
non-owner to claim none). But, on the other hand, maybe that
is not the case. There appear to be technicalities here
based on applicable state property and marital law, etc.,
etc.

MTW

 

[Lanny Williams]

Vic Dura wrote:

One approach is to have ALL deductibles of joint items go to
one individual so they itemize, while the other person takes
the standard deduction.

So I'd go for #3.

I don't have any cites but have always taken the position
that the deductions can be allocated in any reasonable
manner. Among other things, that means that one spouse
cannot deduct items that are specifically associated with
the other; for example, job related expenses or mileage.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Service for Expatriate Americans

 

[Phoebe Roberts, EA]

One approach is to have ALL deductibles of joint items go to
one individual so they itemize, while the other person takes
the standard deduction.

Except that the standard deduction for MFS is $0 when either
spouse itemizes.

Phoebe

 

[A.G. Kalman]

Vic Dura wrote:

One approach is to have ALL deductibles of joint items go to
one individual so they itemize, while the other person takes
the standard deduction.

So I'd go for #3.

Not possible. Both must take the std deduction or both must
itemize.

 

[A.G. Kalman]

Vic Dura wrote:

It's allocated based on who paid it. If the funds come out
of a joint account, then you split it 50-50. If the funds
come out of a separate acount, then the owner of that
account gets it all. If they live in a community property
state and all the assets are community property, then you
split it 50-50 regardless of how the account is titled.

I should have noted that medical expenses are a special item
as one can deduct the amount spent on oneself, a spouse or
dependent. Therefore, one spouse could take 100% of the
medical expenses.

 

[D.F. Manno]

One approach is to have ALL deductibles of joint items go to
one individual so they itemize, while the other person takes
the standard deduction.

But if one MFS spouse itemizes, the other must also itemize.

 

[Harlan Lunsford]

I should have noted that medical expenses are a special item
as one can deduct the amount spent on oneself, a spouse or
dependent. Therefore, one spouse could take 100% of the
medical expenses.

Even IF that spouse did not actually pay the expenses?

ChEAr$,
Harlan Lunsford, EA n LA
Fri 18 Feb 2005

 

[D. Stussy]

Vic Dura wrote:

One approach is to have ALL deductibles of joint items go to
one individual so they itemize, while the other person takes
the standard deduction.

Such is not possible. If one itemizes, the "standard
deduction" for the other is ZERO.

 

[A.G. Kalman]

Even IF that spouse did not actually pay the expenses?

The underlying assumption was that the funds were paid out
of a joint account. One spouse could claim 100% of the
medical under that assumption. The answer to your question
would be "No" if the funds were paid out of a "separate"
account.

 

[Harlan Lunsford]

The underlying assumption was that the funds were paid out
of a joint account. One spouse could claim 100% of the
medical under that assumption. The answer to your question
would be "No" if the funds were paid out of a "separate"
account.

And of course that was my assumption, i.e. separate
accounts, since most sane couples maintain separate bank
accounts and pay bills separately. Some, in addition,
maintain what's called a "household" account to pay common
expenses.

Just goes to show ya: different strokes for different
folks.

ChEAr$,
Harlan Lunsford, EA n LA
Wed 23 Feb 2005

 

[Dick Adams]

And of course that was my assumption, i.e. separate
accounts, since most sane couples maintain separate bank
accounts and pay bills separately.

Harlan, You are going to get in trouble with your comment
"most sane couples maintain separate bank accounts and pay
bills separately". Susan and I have a joint checking
account from which I am not allowed to write checks (it has
something to do with my forgetting the check amounts). I
have a separate checking account which is treated like an
impress petty cash account.

On the other hand we have no joint credit cards. Susan
reconciles both checking accounts, pays all bills, and
reads my mother's mail for me. (My mother is a highly
accomplished guilt tripper.)

Dick

 

[MTW]

And of course that was my assumption, i.e. separate
accounts, since most sane couples maintain separate bank
accounts and pay bills separately. Some, in addition,
maintain what's called a "household" account to pay common
expenses.

Keep in mind that in community property states (where over
40% of the population lives), such "separate" checking
accounts are most likely "community" property nevertheless.
In such cases, you can't just go by whose name is on the
account.

MTW

 

[Phoebe Roberts, EA]

And of course that was my assumption, i.e. separate
accounts, since most sane couples maintain separate bank
accounts and pay bills separately.

I'll have to disagree with you there. Most of our clients
(sane or otherwise) have one account and pay all the bills
out of it. Although the type who choose to MFS are much
more likely to have separate accounts.

There was an article about multiple accounts versus one
account in today's WSJ, and I think they said about half of
couples have no separate accounts.

Phoebe

 

[Brian]

And of course that was my assumption, i.e. separate
accounts, since most sane couples maintain separate bank
accounts and pay bills separately.

Are you saying that I am insane because my wife and I have
only joint accounts? Why should I have separate accounts in
a community property state?

Actually, in my practice, I find that very few couples have
separate accounts and pay bills separately.

 

[Harlan Lunsford]

Harlan Lunsford wrote:

Harlan, You are going to get in trouble with your comment
"most sane couples maintain separate bank accounts and pay
bills separately". Susan and I have a joint checking
account from which I am not allowed to write checks (it has
something to do with my forgetting the check amounts). I
have a separate checking account which is treated like an
impress petty cash account.

On the other hand we have no joint credit cards. Susan
reconciles both checking accounts, pays all bills, and
reads my mother's mail for me. (My mother is a highly
accomplished guilt tripper.)

Me get in trouble for that? After reading your reply....
I rest my case... (grin)

Never heard of a joint credit card however.

Further to the subject though, if I had my way about it
there would be no joint returns and each taxpayer would file
his/her own.

Lest ANYone get the wrong impression, I'm still a firm
believer in marriage, the foundation of this country.

ChEAr$,
Harlan Lunsford, EA n LA

Moderator:
I am tacking on to this because you must live in a
different world. As a practical matter, creditors have
a difficult time attaching assets held "in the entirities"
such as real estate, cars, joint checking accounts, and
joint savings accounts. When filing bankruptcy, most
couples have to file jointly because of joint credit cards.
My point being that assets should be held jointly and
liabilities should be held individually.

Since you raised maintaining separate identities in your
next post, I would like to point out that a woman's name
does not change at marriage by operation of law. You can
learn more about that in "Surnames for Women: A Decision-
making Guide" by Susan J. Kupper, Ph.D. How many women
do maintain separate identities? Or does it just apply
to checking accounts?

As Johnny Carson once said "Marriage must be a good idea
because I keep doing it."

 

[Harlan Lunsford]

Harlan Lunsford wrote:

I'll have to disagree with you there.

yep, just like Dick said.

Most of our clients (sane or otherwise) have one account
and pay all the bills out of it. Although the type who
choose to MFS are much more likely to have separate accounts.

There was an article about multiple accounts versus one
account in today's WSJ, and I think they said about half of
couples have no separate accounts.

Which means the other "about half" maintain their own
identities.

ChEAr$,
Harlan Lunsford, EA n LA

 

[Maren Purves]

Harlan Lunsford wrote:

do you have separate utility bills????

Harlan, You are going to get in trouble with your comment
"most sane couples maintain separate bank accounts and pay
bills separately". Susan and I have a joint checking
account from which I am not allowed to write checks (it has
something to do with my forgetting the check amounts).

you sound like us, well almost. I don't mind Norman writing
checks as long as they're relatively small, but he doesn't.
We have 2 joint checking accounts though. It's a bit of a

On the other hand we have no joint credit cards.

ours are mostly joint but we also have one non-joint one
each.

Susan
reconciles both checking accounts, pays all bills, and
reads my mother's mail for me. (My mother is a highly
accomplished guilt tripper.)

Wish he did that with my mother's email ... Other than me
being the one with the parents, same here. Including the
occasional question about whether a credit card charge is
legit.

Decisions are made together, paperwork is done by me.

Maren