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Separation: Taxable Earnings

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Matt and Sandy reside in a community property state. Matt left home in April 2006 because of disputes with his wife, Sandy. Subsequently, Matt earned $15,000. Before leaving home in April, Matt earned $3,000. Sandy was unaware of Matt's whereabouts or his earnings after he left home. The $3,000 earned by Matt before he left home was spent on food, housing, and other items shared by Matt and Sandy. Matt and Sandy have one child, who lived with Sandy after the husband left home.

a. Is any portion of Matt's earnings after he left home taxable to Sandy?
b. What filing status is applicable to Sandy if she filed a return?
c. How much income would Sandy be required to report if she filed?
d. Is Sandy required to file?

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Solution Summary

This response determines how much income the wife would be able to report after the husband has left home.

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a. No. It is Matt's earnings, not Sandy's for tax purposes.

b. Sandy can filed as Head of household with 2 dependents (herself and her son) or married filing separate (based on 2 dependents). However, according to the federal filing requirements, although, she is ...

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