Calculating Income for Separate Tax Return

Lee and Pat's Tax Situation

Lee and Pat are married taxpayers living in Louisiana. Lee earns wages of $40,000 and has $5,000 of dividend income from separate property. Lee and Pat also have interest income from community property of $10,000.

Calculating Lee's Separate Tax Return Income

When Lee and Pat file separate income tax returns, the amount of income that must be included on Lee's separate tax return can be calculated as follows:

Wages earned by Lee = $40,000

Dividend income from separate property = $5,000

Interest income from community property = $10,000

Now, the amount of income that must be included on Lee's separate tax return:

= 50% of [Wages earned + Dividend income + Interest income]

= 0.50 × ($40,000 + $5,000 + $10,000)

= 0.50 × $55,000

= $27,500