|
starfleet_grad
|
 |
« on: July 20, 2008, 02:37:15 PM » |
|
I'll be starting my new job at my new uni in a few weeks and just realized that I have no idea how to handle filing state income taxes. I presume I will file a return for State A based on the salary I earned there and for State B based on what I earned there and simply split up my total income for the state returns, but what about, say, investment income that no taxes have been paid on yet? Would I go through the statement line by line and see when transactions were made and add them to each state based on that, or do I simply add the whole shebang to the return for one state (preferably the one with the lower income tax rate)?
I supposed there is a simple answer for all this, and people move all the time, so any advice from those who have moved across state lines would be appreciated. Is there anything else, too, that I should be aware of?
|
|
|
|
|
Logged
|
I'm a teacher, Jim, not a customer service representative.
|
|
|
|
shrek
|
|
« Reply #1 on: July 20, 2008, 02:41:04 PM » |
|
I've done this and you're basically correct salary earned in State A pays there, etc. For investments it's based on how many months you were in residence where (8 months in State A, 4 months in State B).
|
|
|
|
|
Logged
|
|
|
|
|
clean
|
|
« Reply #2 on: July 20, 2008, 04:12:05 PM » |
|
Since you are no longer a resident, there is (in the 3 instances Ive dealt with) a Non Resident form. (It usually has NR after whatever name and number your regular state income tax form is). That form provides a way to prorate the taxes. You do your federal form first, then do the state forms. It is not that much harder than doing the regular state income tax form you did a few months ago.
Dont worry about it too much until January. You wont be able to even get the forms much before that, and you wont have your w-2s to do the federal forms until the end of Jan.
Congrats on the new job and the move.
|
|
|
|
|
Logged
|
"The Emperor is not as forgiving as I am" Darth Vader
|
|
|
conjugate
Compulsive punster and insatiable reader, and
Member-Moderator
Distinguished Senior Member
Posts: 17,026
Tends to have warped sense of humor
|
|
« Reply #3 on: July 20, 2008, 04:27:54 PM » |
|
Or, if you can afford it, go with H&R Block or some other tax professional. The bright side of the thing is that usually the state forms are easier (in my experience) than the federal 1040, because they just ask you to copy stuff from the federal return without making you show the details of how it was calculated.
|
|
|
|
|
Logged
|
Unfortunately, I think conjugate gives good advice.
∀ε>0∃δ>0∋|x–a|<δ⇒|ƒ(x)-ƒ(a)|<ε |
|
|
|
americanist
|
|
« Reply #4 on: July 20, 2008, 08:32:19 PM » |
|
It varies by state. You'll file as a nonresident or part-year resident. I have lived in states that required part-year residents to pay tax on the income they earned while they were residents, and I have lived in states where part-year residents paid tax on their pro-rated income.
What sucked was when I moved from a state that had a pro-rated rule (e.g., lived here for half the year? pay tax on half your annual income) to a state that had an "income earned here" rule. Since I had moved to take a higher-paying job, I ended up paying state taxes on the same money in two states.
|
|
|
|
|
Logged
|
|
|
|
conjugate
Compulsive punster and insatiable reader, and
Member-Moderator
Distinguished Senior Member
Posts: 17,026
Tends to have warped sense of humor
|
|
« Reply #5 on: July 20, 2008, 09:00:32 PM » |
|
That stings. It would be best to move to Texas, Alaska, or (I think) Delaware (which have no state income taxes, though my information may be out of date). Any other states with no income tax?
|
|
|
|
|
Logged
|
Unfortunately, I think conjugate gives good advice.
∀ε>0∃δ>0∋|x–a|<δ⇒|ƒ(x)-ƒ(a)|<ε |
|
|
|
aristotelian
|
|
« Reply #6 on: July 21, 2008, 08:16:42 AM » |
|
Get TurboTax or some equivalent. It's cheaper than going to a professional and it will calculate everything for you. It will just ask when you moved, then you hit a button and it will print returns for both states. I had one year in which I moved, and during part of the year lived in one state while working in the other. I'm proud to say, I did my taxes myself with Turbotax.
|
|
|
|
|
Logged
|
|
|
|
|
pedanterast
|
|
« Reply #7 on: July 21, 2008, 11:38:48 AM » |
|
That stings. It would be best to move to Texas, Alaska, or (I think) Delaware (which have no state income taxes, though my information may be out of date). Any other states with no income tax?
Delaware has a state income tax. In addition to Alaska and Texas, Nevada, Florida, Wyoming, Washington, and South Dakota impose no income tax. Tennessee and New Hampshire only tax investment income and not wages. However since there is no free lunch, these states tend to have higher sales taxes and/or higher property taxes. Wyoming is an exception since it gets most of its revenue from mineral severance taxes. Illinois has a very low tax rate, a flat 3%. |
|
|
|
« Last Edit: July 21, 2008, 11:42:00 AM by pedanterast »
|
Logged
|
|
|
|
|
dr_zack
|
|
« Reply #8 on: July 21, 2008, 12:03:45 PM » |
|
Washington has no state income tax...and is an amazing place to be, too!
|
|
|
|
|
Logged
|
|
|
|
|
kedves
|
|
« Reply #9 on: July 21, 2008, 01:32:56 PM » |
|
Get TurboTax or some equivalent. It's cheaper than going to a professional and it will calculate everything for you. It will just ask when you moved, then you hit a button and it will print returns for both states. I had one year in which I moved, and during part of the year lived in one state while working in the other. I'm proud to say, I did my taxes myself with Turbotax.
I like TurboTax, too. I've been using it for several years, including a year with this two-state situation. The federal and state filing fees are more than offset by the deductions it finds and the headaches it saves me. |
|
|
|
|
Logged
|
|
|
|
|
pedanterast
|
|
« Reply #10 on: July 21, 2008, 08:05:47 PM » |
|
Or, if you can afford it, go with H&R Block or some other tax professional. Although H & R Block has been inexplicably successful at marketing themselves as "tax professionals," it would be more accurate to call them a bunch of ass-hat clowns who could not pour urine out of a shoe if instructions were written on the heel. If they did not offer "refund anticipation loans," which are a scam that preys on desperate people, Turbo Tax would have already rendered them obsolete. And, I will be happy when (not if) that does occur. |
|
|
|
|
Logged
|
|
|
|
conjugate
Compulsive punster and insatiable reader, and
Member-Moderator
Distinguished Senior Member
Posts: 17,026
Tends to have warped sense of humor
|
|
« Reply #11 on: July 21, 2008, 09:10:14 PM » |
|
Or, if you can afford it, go with H&R Block or some other tax professional. Although H & R Block has been inexplicably successful at marketing themselves as "tax professionals," it would be more accurate to call them a bunch of ass-hat clowns who could not pour urine out of a shoe if instructions were written on the heel. If they did not offer "refund anticipation loans," which are a scam that preys on desperate people, Turbo Tax would have already rendered them obsolete. And, I will be happy when (not if) that does occur. It occurs to me, now that I think of it, H&R Block do charge me to use software that amounts to TurboTax. I understand the Deluxe edition of TurboTax gives you one (1) state return; can you get two including form(s) NR out of the sucker? Or are you doomed to pay extra? Another thing that occurs to me: H&R Block also markets a "peace-of-mind guarantee" that I've never purchased for my own taxes. But I dimly remember reading that all that the peace-of-mind-guarantee will get you is something that the law requires them to give anyway, namely an assurance that the tax preparer be responsible for his or her work (including penalties if mistakes were made). Does anybody know if the law has changed so that the peace-of-mind guarantee actually buys something worth paying for? I doubt that it does, but would like to know just in case. |
|
|
|
|
Logged
|
Unfortunately, I think conjugate gives good advice.
∀ε>0∃δ>0∋|x–a|<δ⇒|ƒ(x)-ƒ(a)|<ε |
|
|
|
pedanterast
|
|
« Reply #12 on: July 21, 2008, 09:41:59 PM » |
|
I'd be leery of a "peace of mind" guarantee from HRB since I don't think they have any extra pieces of mind to hand out. Maybe slivers. My state allows you to file on-line for free. It's what's known as a "piggy-back" state, which means your starting point for your state return is your federal taxable income. And, there are very few possible adjustments (interest on treasury securities are exempt from state taxation, for example, and if you get a refund for a year you claim state income tax as an itemized deduction, that is taxed at the state level). I believe the majority of states are "piggyback" and then the state returns are incredibly simple. A notable exception is Pennsylvania, not a piggy back state and notorious for the complexity of its state tax returns.
|
|
|
|
|
Logged
|
|
|
|
|
pink_
|
|
« Reply #13 on: July 21, 2008, 11:16:08 PM » |
|
I had to purchase an add-on from TurboTax to file the state returns for my second state, but it was worth it. It delayed my tax-rebate-incentive-whatever until late June, but the program was very easy to use.
|
|
|
|
|
Logged
|
Horses don't have seatbelts. Listen to Pink, she's smart.
|
|
|
raoul
Junior member
Posts: 72
|
|
« Reply #14 on: July 28, 2008, 12:37:35 PM » |
|
I used H&R Block once and surprisingly enough I had a very positive experience. I had some very complicated taxes one year due to having had fellowships in a couple of states other than my state of residence. I had no idea how or what to file, or what I could deduct (e.g., travel, living expenses, etc), and I wasn't able to find any online sources of information about tax issues for academic fellowships. I asked some of my friends for advice but they basically just seemed to be guessing about what to do. So eventually I went to HR Block to see if they could help me; just by sheer luck, I was assisted by a woman who was a retired economics professor from a local community college, so she understood academic issues. She researched some things for me and after a week I went in and picked up my completed taxes. She then went over everything she had done so in the future I would be able to do it myself.
I'm sure it is hit or miss but some of the HR Block employees do actually seem to have something to offer.
|
|
|
|
|
Logged
|
|
|
|
|
