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CCH Axcess Tax

Prepare Tax Liability Comparison for Joint and Married Separate

An entry of "Y" in this field selects the tax liability comparison for joint and married filing separate returns. It is available if the married filing jointly filing status is selected on the General > Basic Data > General Section > Filing Status (MANDATORY) field.

Enter "N" to override the request in the Return Configuration Set.

When this field is blank and no requesting entry is present in the Return Configuration Set, the Filing Status Comparison is not prepared.

When "N" is entered, the return is calculated as a joint return, and the joint return is prepared. Additionally, married filing separate tax calculations are made. The results of all three calculations are displayed on the federal government forms view, Filing Status Comparison Worksheet, and this form is also included in the accountant's and taxpayer's copy of the tax return. A diagnostic message is prepared identifying the best tax method as well as the corresponding tax savings.

The TSJ codes on various worksheets are used to determine the allocation of income and deduction entries to determine the estimated tax savings on the tax comparison worksheet. TSJ code entries of "J" are divided equally between the taxpayer and spouse if that split is allowable under the married filing separate rules. Blank TSJ entries are either divided equally between the taxpayer and spouse or assigned to the taxpayer, depending on the TSJ default treatment on the worksheets.

There are two exceptions to the above treatment of "J" coded entries. Dependent information entered on General > Basic Data > Dependents with a TSJ code of "J" is assigned to the taxpayer in the married filing separate calculations. Child Care Credit information on the Child and Dependent Care Expenses (Form 2441) worksheet with a TSJ code of "J" is also assigned to the taxpayer.

In addition to the TSJ codes, the FSO codes are available on selective federal, state and city worksheets. The applicable FSO or TSJ code must be entered so that the information associated with the code can be assigned to either the taxpayer or the spouse.

The special limitation rules for taxpayers filing married separate are included in the calculation for taxable social security, IRA deductibility, the Schedule R credit, and passive activities. The limitation rules can be by-passed by entering an X in General > Basic Data > Filing Status and Exemptions > Married Not Filing Jointly and Taxpayer Did Not Live With Spouse During 2020.

An entry must also be made in General > Return Options > Filing Status Comparison and Filing Status Optimization > Deductions Code to select the deduction method for the married filing separate calculations. CCH Axcess Tax does not optimize between standard or itemized deductions in the married filing separate calculations.

The married filing separate calculations do not include the calculation for Form 1116, Form 2555 or Form 2210.

The Section 179 limitations for both the expenses deduction and the cost of Section 179 property are divided equally between the taxpayer and spouse.

Because the married filing separate calculations effectively force the return to be calculated three times, the total return calculation time is longer.

The option to produce two separate tax return files from a joint return can be requested using the menu selection, File/Split Joint Return.

The basis for segregating the return information is the existing TS/TSJ and FSO code fields found on the federal, state and city worksheets.

Once the option is selected, two additional separate returns will be created. These newly created returns can be accessed individually for further processing.