How to Fill Out Form 8958?

To properly fill out Form 8958, which is used to allocate tax amounts between spouses or registered domestic partners (RDPs) with community property rights who file separate income tax returns, follow these detailed steps:

How to Fill Out Form 8958

Form 8958 is designed for individuals who are subject to community property laws and file separate federal income tax returns. It helps in accurately reporting community and separate income, deductions, credits, and other relevant amounts. Each spouse or RDP must report half of all community income and their own separate income.

Step-by-Step Instructions

  1. Identify Income and Deductions: Before filling out the form, ensure you can distinguish between community income (income earned during marriage or partnership) and separate income (income earned from individual property).
  2. Filling Out the Form:
  • Column A: Enter the total amount of each type of income, deduction, credit, or tax in this column.
  • Columns B and C: Allocate the amounts between you and your spouse or RDP. The sum of columns B and C should equal the amount in column A.
  1. Line-by-Line Instructions:
  • Line 1: Report wages from each payer. Enter total wages in column A and allocate between spouses in columns B and C.
  • Line 2: Report interest income similarly—total in column A, allocation in B and C.
  • Line 3: For dividends, follow the same pattern as above.
  • Line 4: State income tax refunds should be reported here with totals in column A and allocations in B and C.
  • Line 5: Report self-employment income from each entity. Total in column A; allocate in columns B and C.
  • Line 6: Enter gains or losses from each entity similarly.
  • Line 7: Report pension income from each payer with total in column A and allocations in B and C.
  • Line 8: For rents, royalties, partnerships, estates, or trusts, report totals in column A and allocate accordingly.
  • Line 9: Deductible part of self-employment tax should be entered here with proper allocations.
  • Line 10: Report total self-employment tax similarly.
  • Line 11: For taxes withheld from each payer or entity, report totals in column A with allocations in columns B and C.
  • Line 12: Identify any other items not previously reported (like social security benefits), enter totals in column A, then allocate.
Additional Notes on Form 8958

Additional Notes

  • If more space is needed for any line item, attach a statement listing the source of the item along with total amounts and allocations. Include your name and Social Security Number (SSN) on these statements.

Final Review

  • Ensure that all entries are complete and accurate before submitting the form along with your tax return. Check that the totals in columns B and C match those in column A for each line.

By following these steps carefully, you can ensure that Form 8958 is filled out correctly according to IRS guidelines for reporting community property income on separate returns.