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Posted by Arthur Kamlet on July 16, 2008, 11:11 pm
Please log in for more thread options >Arthur Kamlet wrote:
>
>>>> My spouse and I are filing separate returns. How can we split our itemized
>>>> deductions?
>>>
>>> Start with Table 1 in IRS Pub 504, available on line at the IRS web
>>> site. If you live in one of the community property states, the rules
>>> are different, you might also want to consult Pub 555 in this case.
>>
>>
>> If you're not in a community property state and if you agree on
>> a division other than 50/50, or other than your actual payments,
>> then split according to that division.
>
>All it takes is agreement? So for example if I pay $20K medical
>expenses for myself out of my own funds, my spouse filing separately can
>claim the $20K on Schedule A if I agree not to claim? Do some states
>have laws that affect this at the federal level?
>
>There is even a statement "Neither spouse may report the total casualty
>loss", for a casualty loss deduction. What if they agree on division of
>100/0, does that over-ride the IRS instructions?
>
>I only ask because this is the second time in my recent memory that
>someone with more experience than I has stated that in non-community
>property states, division of income (first time) / deductions (second
>time) is arbitrary if the two spouses agree. For example, interest on a
>joint tenant savings account can be arbitrarily split, regardless of who
>the money belongs to.
>
>It seems to be at odds with the table in Pub 504, what am I missing?
The rule is every allowed medical expense you paid for yourself,
your spouse or your medical dependent is deductible.
So it becomes second nature to pay everyhing out of a joint acount,
and then decide later who claims the deduction.
If you pay out of a separate account, it can still be done, using the
unlimited gifts between spouses rule -- that is, each spouse can
give unlimited gifts to the other, at any time, as often as desired.
Best, of course, is to pay from a joint account and worry about the
division between spouses filing MFS later.
Only when there is no agreement, does it really matter.
And of course in Ohio where filing MFS is just a natural way of life,
the split can often work to save federal tax as well as Ohio tax.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
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