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Tax Law (Questions About Taxes)/Spouses residents of different states

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Question
A married couple files their federal income tax return using Married Filing Jointly.  Prior to 2010, the couple were full-time residents of Illinois and filed in Illinois as Married Filing Jointly.  

Due to employment situation, the husband's job was transferred to Iowa, about five hours away from their home in Illinois.  Husband is now a full-time resident of Iowa by renting a house and working in Iowa and having Iowa state tax withheld.  Husband comes to Illinois to visit family one weekend a month.  Wife is still a full-time resident of Illinois continuing to live in the house that both husband and wife owns jointly and continuing to work in Illinois having Illinois state income tax withheld.  


How should their income tax be handled?  They will continue to file federal as MFJ.  Since each state withheld income taxes for each spouse, they will need to file both Illinois and Iowa tax returns.  What status should they use on these returns and should they file resident or nonresident returns for each state?

Thank you

Answer
Steve,

Thanks for your question.

For Illinois, if you file a joint federal return and one spouse is a full-year Illinois resident while the other is a part-year resident or a nonresident (e.g., military personnel), you may choose to file “married filing separately.” Do not recompute any items on your federal return. Instead, you must divide the income shown on your joint federal return between your separate Illinois returns following the federal Form 8379, Part III.

For Iowa, you should also file a separate return.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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