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Use the Filing Status optimization tool

The Filing Status Optimization tool doesn't split Organizer data. Evaluate the effect of changes in allowable contributions before you decide the best filing status.
The system uses the spouse's or domestic partner's tax information to complete the
ComPSt
 screen in the
General
 folder. Information from this screen, combined with calculated tax return information for the taxpayer, becomes part of Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States.
  1. Select the
    1040
     screen.
  2. Complete the return with the filing status of married filing joint (
    MFJ
    ) in the 1040 screen.
  3. Identify all income, expense, credit, and other items as belonging to the taxpayer or spouse using the
    T
    ,
    S
    , or
    J
     fields. You can also use the
    Taxpayer
     and
    Spouse
     columns. If you leave these fields blank, the system allocates the amount to the taxpayer. 
    • Use
      J
       to split items equally between the taxpayer and the spouse.
    • Use
      J
       to assign dependents to the taxpayer or the spouse, based on which scenario saves the most taxes for a married filing separate status. (Using this option can cause optimization to take longer.)
    • Use
      T
       or leave the field blank to assign dependents to the taxpayer.
    • Use
      S
       to assign dependents to the spouse.
    • When there are dependents marked with
      J
       in the return, completing optimization takes longer.
  4. Select
    Utilities
    , then
    Filing Status Optimization
    . UltraTax CS automatically generates 2 unique client IDs. 1 ID ends with
    TP
     for the taxpayer. The other ends with
    SP
     (Spouse). The client ID information for the 2 separate clients appears at the top of the
    Filing Status Optimization
     screen.
  5. If the joint return is itemized, separate returns are also itemized. If the joint return uses the standard deduction, the separate returns use the standard deduction. You can force the separate returns to be itemized or use the standard deduction. Select
    Standard
     or
    Itemized
     from the
    Taxpayer
     field.
  6. To force the income or sales tax deduction method for the separate clients, select
    Income, Sales - Table
    , or
    Sales - Actual
     in the
    Taxpayer
     and
    Spouse
     fields. These fields use the income or sales tax deduction method you entered in the
    Joint
     field.
  7. To force the tax refunds on the separate returns, go to the
    Filing Status Optimization
     screen. On the
    General
     tab, mark the
    Force state/local tax refunds
     checkbox. Next, enter the amount in the
    Spouse
     field.
  8. To distribute the maximum dollar limitation for section 179 between the taxpayer and spouse, enter the amount in the
    Sec. 179 dollar limitation percentage
     field. The default is 50/50.
  9. You can calculate the difference between the
    Joint
     column and the
    Taxpayer
     column automatically. Update the
    Taxpayer
     column, then select the corresponding
    Spouse
     column. The system calculates the difference between the
    Joint
     column and the
    Taxpayer
     column and adds the difference to the
    Spouse
     column.
  10. Select next year's Organizer delivery method. If you enter a method in the
    Joint
     field, the
    Taxpayer
     and
    Spouse
     fields fill in the same selection. To select separate delivery methods, enter the method in the
    Taxpayer
     and
    Spouse
     fields.
  11. You can force the Form 2441 earned income exclusion for the spouses on the separate returns. Go to
    Filing Status Optimization
    , then the
    General
     tab. Enter the amount in the
    Spouse earned income for 2441 exclusion
     fields.
  12. If you want to split the married filing joint return using community property rules, go to
    Filing Status Optimization
    , then the
    Community Prop / Filing Status / Other
     tab. Mark
    Split income according to Community Property rules
    .
  13. Select the filing status for the taxpayer and spouse. Go to
    Filing Status Optimization
    , then the
    Community Prop / Filing Status / Other
    . Use the
    Taxpayer
     and
    Spouse
     fields to select the filing status. Only unmarried taxpayers can select a filing status that is not married filing separate.  UltraTax CS doesn't automatically check whether the qualifications are met. 
    • The Filing Status Optimization Report is calculated using the filing status.
    • The filing status savings information is printed at the bottom of the FSO Summary & FSO Report. The report reflects the designated filing status.
  14. If the following don't apply to the taxpayer, you can allocate the amounts between the taxpayer and spouse:
    • Estimated payments in the
      Est or StPmt
       screen.
    • Carryover amounts in the
      CO
       screen.
    • NOLCO
       and
      COGBCr
       screens for the joint return.
  15. Go to the
    Filing Status Optimization
     screen. Select the following tabs and allocate the amounts between the taxpayer and spouse.
    • Payments
    • 5Yr
    • NOL & Other Carryovers
    • Indefinite Carryovers
    • Business Credit Carryovers
  16. If you need to allocate the amounts between the taxpayer and spouse, look at the estimated payments in the
    Est or StPmt
     screen, and the carryover amounts entered in the
    CO
    ,
    NOLCO
    , and
    COGBCr
     screens. Be sure these don't apply to the taxpayer.
  17. Select the
    Preview
     button to view the Filing Status Optimization Summary, then select
    Print All
     to print the report.
  18. If you decide it's best for the clients to file separately, you can use the separate clients that UltraTax CS automatically created to prepare the returns. To save the spouse and taxpayer clients, mark
    Save clients upon exit
    , then select
    Run
    . To open one of the separate clients, select 
    Family
     at the top-right. Select a client, then select
    Open
    .
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