CA State taxes ? How to file?

[Kyle6811 20]

Wondering if anyone knows this. If I file MFJ for CA it appears i have to report and pay on her income due to community property laws.

 

~If we file MFS, does she need to file a return, not being a resident?

[Crazy Cat 39,267]

I know nothing about California tax laws.....but if you file a joint return, you must report and pay any applicable taxes on both spouse's income for the entire year.  That is federal TAX law (unrelated to community property law).  If you file MFS, she does not have to file a return at all (I am assuming she is outside the US).   I would think most states would require the same.

Edited March 6 by Crazy Cat

[JeanneAdil 6,203]

As a nonresident, you pay tax on your taxable income from California sources.

Sourced income includes, but is not limited to:

• Services performed in California
• Rent from real property located in California
• The sale or transfer of real California property
• Income from a California business, trade or profession

Read about filing joint or separate in California and the deductions

she  would pay on worldwide if she is part time resident /she is not /she is nonresdent 

 

As a part-year resident, you pay tax on all worldwide income while you were a resident of California.

https://www.ftb.ca.gov/file/personal/residency-status/part-year-and-nonresident.htm

 

If u file separate,  she has to file 

form 2555 allows for exculsion of foreign income up to 2023, the maximum exclusion is $120,000 per person.

 

Line 13 is for federal adjusted gross income which would be minus 120,000 and taxes due on that amount 

[Kyle6811 20]

26 minutes ago, JeanneAdil said:

As a nonresident, you pay tax on your taxable income from California sources.

Sourced income includes, but is not limited to:

• Services performed in California
• Rent from real property located in California
• The sale or transfer of real California property
• Income from a California business, trade or profession

Read about filing joint or separate in California and the deductions

she  would pay on worldwide if she is part time resident /she is not /she is nonresdent 

 

As a part-year resident, you pay tax on all worldwide income while you were a resident of California.

https://www.ftb.ca.gov/file/personal/residency-status/part-year-and-nonresident.htm

 

If u file separate,  she has to file 

form 2555 allows for exculsion of foreign income up to 2023, the maximum exclusion is $120,000 per person.

 

Line 13 is for federal adjusted gross income which would be minus 120,000 and taxes due on that amount 

Ok so if she earned zero income while I was a part-time resident and we filed jointly, then she should not be required to report any income, does that sound correct, for California?

[JeanneAdil 6,203]

4 minutes ago, Kyle6811 said:

Ok so if she earned zero income while I was a part-time resident and we filed jointly, then she should not be required to report any income, does that sound correct, for California?

follow the site /it is clear on what is part time and what is nonresident status

if part time,  u do not use form 2555 for california income ,   california income is taxable

IS she a RDF  or nonresident?   they are quite different

 

 

If you’re married/registered domestic partner (RDP), you may choose to file separately. Each spouse or partner will prepare a separate tax return and report their individual income and deductions.

[Kyle6811 20]

23 minutes ago, JeanneAdil said:

follow the site /it is clear on what is part time and what is nonresident status

if part time,  u do not use form 2555 for california income ,   california income is taxable

IS she a RDF  or nonresident?   they are quite different

 

 

If you’re married/registered domestic partner (RDP), you may choose to file separately. Each spouse or partner will prepare a separate tax return and report their individual income and deductions.

Thanks Jeanne, have the federal figured out. On that we’re filing mfj, sch 1 for her income & 2555. We’re a husband and wife Electing to be treated as ra for tax purposes.

 

Under CA law I am only a part year resident. She has never lived in the U.S.  As such (as I understand it) only the portion of my/our income that was made while a part time resident, is taxable. Is that correct?

[top_secret 2,063]

I will relate what we did filing CA taxes as MFJ with a non resident spouse, with the extreme caveat that I am not any tax professional, just read some stuff online and let TurboTax do the rest.  From what we were able to gather it seems that California's main requirement is that you must file the same status on state as you did on Federal.  IE if you file MFJ on your  Federal return, then you are required to file MFJ on CA state too.  From there we just answered all the residency questions very literally in TurboTax and the program decided we should file 540NR (California Nonresident or Part-Year Resident Income Tax Return). SCHEDULE CA (540NR) Column E allowed for excluding income from non resident and non california sources.  If you were a part year resident you pay taxes on all income earned while a resident and only on income from California sources while you were nonresident.  They had a worksheet for splitting it up.

 

In our case the return was accepted and very promptly paid months before my wife even had an ITIN.  CA FTB has not complained, and I am quite sure they would have if they saw anything they didn't like, so it must have all been good..

[Kyle6811 20]

1 hour ago, top_secret said:

I will relate what we did filing CA taxes as MFJ with a non resident spouse, with the extreme caveat that I am not any tax professional, just read some stuff online and let TurboTax do the rest.  From what we were able to gather it seems that California's main requirement is that you must file the same status on state as you did on Federal.  IE if you file MFJ on your  Federal return, then you are required to file MFJ on CA state too.  From there we just answered all the residency questions very literally in TurboTax and the program decided we should file 540NR (California Nonresident or Part-Year Resident Income Tax Return). SCHEDULE CA (540NR) Column E allowed for excluding income from non resident and non california sources.  If you were a part year resident you pay taxes on all income earned while a resident and only on income from California sources while you were nonresident.  They had a worksheet for splitting it up.

 

In our case the return was accepted and very promptly paid months before my wife even had an ITIN.  CA FTB has not complained, and I am quite sure they would have if they saw anything they didn't like, so it must have all been good..

Thank you, this is what I was seeing as well. 

[Kyle6811 20]

3 hours ago, Crazy Cat said:

I know nothing about California tax laws.....but if you file a joint return, you must report and pay any applicable taxes on both spouse's income for the entire year.  That is federal TAX law (unrelated to community property law).  If you file MFS, she does not have to file a return at all (I am assuming she is outside the US).   I would think most states would require the same.

Yep, that part is done, California has some different stuff. Thanks cc

[Kyle6811 20]

On 3/6/2024 at 8:25 AM, top_secret said:

I will relate what we did filing CA taxes as MFJ with a non resident spouse, with the extreme caveat that I am not any tax professional, just read some stuff online and let TurboTax do the rest.  From what we were able to gather it seems that California's main requirement is that you must file the same status on state as you did on Federal.  IE if you file MFJ on your  Federal return, then you are required to file MFJ on CA state too.  From there we just answered all the residency questions very literally in TurboTax and the program decided we should file 540NR (California Nonresident or Part-Year Resident Income Tax Return). SCHEDULE CA (540NR) Column E allowed for excluding income from non resident and non california sources.  If you were a part year resident you pay taxes on all income earned while a resident and only on income from California sources while you were nonresident.  They had a worksheet for splitting it up.

 

In our case the return was accepted and very promptly paid months before my wife even had an ITIN.  CA FTB has not complained, and I am quite sure they would have if they saw anything they didn't like, so it must have all been good..

@top_secret 

What did you submit with the w7 as supporting documentation? Passport? / copy of marriage license? I’m being told that the issuing agency here in Mexico will just tell me to go to a notary for a certified copy..

Edited March 10 by Kyle6811

[top_secret 2,063]

15 hours ago, Kyle6811 said:

@top_secret 

What did you submit with the w7 as supporting documentation? Passport? / copy of marriage license? I’m being told that the issuing agency here in Mexico will just tell me to go to a notary for a certified copy..

Marriage certificate wasn't required. It's an easy standard service to get a certified copy of a Philippine passport from Philippines Department of Foreign Affairs so that's what we did. It sounds not as easy in Mexico so Im not much help there.

 

Whatever you do, don't send in the actual passport since it disappears into an IRS black hole for an indefinite period of time with no traceability and that's not where anyone wants their passport to be during an immigration process.  There are certified acceptance agents in Mexico so that might be a good option if conveniently located.

[Kyle6811 20]

4 hours ago, top_secret said:

Marriage certificate wasn't required. It's an easy standard service to get a certified copy of a Philippine passport from Philippines Department of Foreign Affairs so that's what we did. It sounds not as easy in Mexico so Im not much help there.

 

Whatever you do, don't send in the actual passport since it disappears into an IRS black hole for an indefinite period of time with no traceability and that's not where anyone wants their passport to be during an immigration process.  There are certified acceptance agents in Mexico so that might be a good option if conveniently located.

Thanks, @top_secret, it looks like a notary here might actually be the place that certifies a copy of an original document. I guess we’ll find out.

[Kyle6811 20]

2 hours ago, MylieBray said:

Hello. If you file a return as a spouse (MFJ) for California, you may have to report income and pay taxes under that state's community property laws.

Idk, I just followed turbos tax’s prompts.