How to File Taxes in a Community Property State

How to File Taxes in a Community Property State
File Taxes in a Community Property State

General Rules and Property

Step 1

Determine if you and your spouse live in a community property state. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are community property states.

Step 2

Determine if you're filing a separate return from your spouse. Community property laws are not tax-relevant if you're filing a joint return with your spouse.

Step 3

Be aware that when community property rules apply, you must split community property income, adjustments and deductions - 50 percent to your spouse and 50 percent to you.

Step 4

In determining separate property, ask yourself if you owned property before the marriage. This is separate property even in a community property state.

Step 5

Determine if you acquired property during your marriage while you lived in a non-community-property state. This remains separate property even after you move to a community property state.

Step 6

Calculate if you had money before you were married or if you earned money during marriage while you lived in a non-community-property state. This money is considered to be separate funds.

Step 7

Determine if you inherited or were given property or money separately from your spouse during marriage. This is separate property or separate funds.

Step 8

Verify that, during your marriage, you purchased property using separate funds. This is separate property.

Spouses Who Lived Apart All Year

Step 1

Determine if you lived apart from your spouse at all times during the year and if you are not filing a joint return.

Step 2

Treat money from your earned income and your trade or business as your income alone. Don't include any income from your spouse's earned income and trade or business on your tax return.

Step 3

Treat money from your partnership interest and income from property you own separately as your income alone. Don't include any income from your spouse's partnership interest or separately owned property on your tax return.

Step 4

Treat your Social Security benefits as your income alone. Don't include your spouse's Social Security benefits on your tax return.

Step 5

Treat interest, dividends and income from jointly owned property according to community property rules.

Step 6

Treat military retirement pay and civil service retirement pay as community property income only if the two of you were married and living in a community property state at the time of military service or civil service employment. Otherwise, treat it as separate income.

Spouses Who Didn't Live Apart All Year

Step 1

Determine if you lived with your spouse at some time during the tax year and if you are not filing a joint return.

Step 2

Treat all money from earned income, trade or business, partnerships, dividends, interest and jointly owned property according to community property rules - splitting it fifty-fifty for the period you lived together.

Step 3

Treat military retirement pay and civil service retirement pay as community property income only if the two of you were married and living in a community property state at the time of military service or civil service employment. Otherwise, treat it as separate income.

Step 4

Treat income from separate property as separate income in Arizona, California, Nevada, New Mexico and Washington. Treat it as community property income in Idaho, Louisiana, Texas and Wisconsin.