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Share and share alike: your taxes in a community property state

September 12, 2012

The hubby and I have always shared our finances.

We've both worked. Sometimes his paycheck has been bigger. A few times, mine has. Either way, we put all our earnings into one joint checking account and go from there.

I've always joked that we share everything because we were married in Texas, a community property state.


Kids sharing a shake courtesy andrechinn via Flickr Kids sharing a shake by andrechinn via Flickr

Even when we moved away for a while, I told the hubby we still were operating under the what's yours is mine philosophy. Now we're back home in our native Lone Star State and I've got the law back on my side.

While I'm sure all y'all are enjoying my little financial anecdote, I bring it up not just for entertainment purposes, but because this week's Weekly Tax Tip is a look at taxes in community property states.

Nine states have community property laws: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and
Wisconsin.

If you're in one of them, your taxes could be complicated if you file separate returns.

Divorce gets even trickier in these jurisdictions.

And same-sex
couples in California, Nevada and Washington, where registered domestic partnerships (and some 2008 Golden State weddings) are recognized, also must deal with
community property laws in filing federal tax returns.

Since their relationships aren't recognized by Uncle Sam, they must file separate federal 1040s and deal with the community property rules on those two forms.

Now I'm not saying let taxes determine where you settle, but do keep in mind that if you move to one of the nine community property states, it could affect your finances and your taxes.

You also might find these items of interest:

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Credits/Deductions
Disasters
Family
Filing and Paying Taxes
Politics/Laws
Refunds
State Taxes
Tax Brackets/Inflation
Tax Tips
Comments
  • Jiachen Zong
    14 years ago Reply

    As most people think that tax differentiation will lead people to make decisions on where they want to live in order to be liable with the least tax, however, that doesn’t make any difficult decisions at all, because across the U.S., the law was legislated to make people live equally and peacefully, even these nine states followed by community property rules, they bear more sale taxes on the other hand probably if they recognized the difference of what they have paid across the boundaries. Some states may have to decide the balance between different taxes in order to comfort residents with states and distribute exclusive benefits out of tax collections.

  • Porta Gellc
    14 years ago Reply

    You are one straightforward writer. I enjoyed reading your article and taking in all the interesting information. I share your thoughts on many points in this content. This is great.

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