Tax Question

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0L Hoping for 1
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Joined: Sun Jan 25, 2009 9:36 pm

Tax Question

Postby 0L Hoping for 1 » Tue May 01, 2012 11:30 am

To someone who knows a lot more about tax than me. I have read around the site and asked my firm and it looks like they will allow me to add however many withholdings will make my tax the correct amount so that isn't a worry but now I am trying to figure out my state income tax. I have been living in a state with a state income tax as a law student for 2 years. I am registered to vote here, my car is here, etc. However, all of the money I make will be in a state with no income tax and its where I intend to go after finishing 3L year. Will I still need to figure out a way to send tax payments to the state with the income tax? Do I need to include the full amount of my salary in both states? Can I claim residency in the other state because I intend to return?

Sorry if these are dumb questions ...

BeautifulSW
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Joined: Fri Jul 09, 2010 11:52 am

Re: Tax Question

Postby BeautifulSW » Tue May 01, 2012 2:53 pm

They aren't dumb questions but they might not be questions that anyone here could answer without knowing a bit more and probably doing some research. SALT (state and local tax) is a significant tax sub-specialty.

BeautifulSW
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Re: Tax Question

Postby BeautifulSW » Tue May 01, 2012 4:29 pm

Sorry, I was interrupted while making that last post.

The place to start is the general income tax publication for the income-taxing state. If both states claimed income tax from you, there would be an apportionment process but see what the pub. says.

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dingbat
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Re: Tax Question

Postby dingbat » Tue May 01, 2012 10:09 pm

Two questions:

1) will you move to said no income tax state when you start your job?
Specifically, will you earn any income while still a resident of the first state?

2) when will you move?
More specifically, will you move to the new state prior to the end of June?

Basically, if you live in state A less than half a year (181 days, I think) and earn no income while a resident of state A, you will not owe any income tax to state A (although you may need to file there)

0L Hoping for 1
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Joined: Sun Jan 25, 2009 9:36 pm

Re: Tax Question

Postby 0L Hoping for 1 » Tue May 01, 2012 10:19 pm

dingbat wrote:Two questions:

1) will you move to said no income tax state when you start your job?
Specifically, will you earn any income while still a resident of the first state?

2) when will you move?
More specifically, will you move to the new state prior to the end of June?

Basically, if you live in state A less than half a year (181 days, I think) and earn no income while a resident of state A, you will not owe any income tax to state A (although you may need to file there)


Thank you guys for the responses, the state's publications are so confusing. The state with an income tax is Illinois who told me "Our tax system is based on intentions. However, we will look to legal residency also."

1) I am going to move to the non-taxing state May 25th and will be there until October. Then I will be back in Illinois from October until May of next year. After which I will be moving to the non-taxing state. I work as an RA during the year in Illinois so I make about $2000.

Thanks guys!

CanadianWolf
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Joined: Wed Mar 24, 2010 4:54 pm

Re: Tax Question

Postby CanadianWolf » Tue May 01, 2012 10:24 pm

Q: Where are the folks who work in NYC, but live in New Jersey when you need them ? :D



A: Probably stuck in traffic.

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dingbat
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Joined: Wed Jan 11, 2012 9:12 pm

Re: Tax Question

Postby dingbat » Tue May 01, 2012 10:27 pm

0L Hoping for 1 wrote:
dingbat wrote:Two questions:

1) will you move to said no income tax state when you start your job?
Specifically, will you earn any income while still a resident of the first state?

2) when will you move?
More specifically, will you move to the new state prior to the end of June?

Basically, if you live in state A less than half a year (181 days, I think) and earn no income while a resident of state A, you will not owe any income tax to state A (although you may need to file there)


Thank you guys for the responses, the state's publications are so confusing. The state with an income tax is Illinois who told me "Our tax system is based on intentions. However, we will look to legal residency also."

1) I am going to move to the non-taxing state May 25th and will be there until October. Then I will be back in Illinois from October until May of next year. After which I will be moving to the non-taxing state. I work as an RA during the year in Illinois so I make about $2000.

Thanks guys!
You will need to file in Illinois
You're probably gonna owe some taxes in Illinois

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dingbat
Posts: 4976
Joined: Wed Jan 11, 2012 9:12 pm

Re: Tax Question

Postby dingbat » Tue May 01, 2012 10:29 pm

CanadianWolf wrote:Q: Where are the folks who work in NYC, but live in New Jersey when you need them ? :D



A: Probably stuck in traffic.

Very different situation, but...

1) pay NY income tax (as a non-resident)
2) pay NJ income tax (as a resident) but get a credit for taxes paid in NY
Because NY taxes are higher, NJ tax liability is (usually) $0

0L Hoping for 1
Posts: 1325
Joined: Sun Jan 25, 2009 9:36 pm

Re: Tax Question

Postby 0L Hoping for 1 » Tue May 01, 2012 10:38 pm

dingbat wrote:
0L Hoping for 1 wrote:
dingbat wrote:Two questions:

1) will you move to said no income tax state when you start your job?
Specifically, will you earn any income while still a resident of the first state?

2) when will you move?
More specifically, will you move to the new state prior to the end of June?

Basically, if you live in state A less than half a year (181 days, I think) and earn no income while a resident of state A, you will not owe any income tax to state A (although you may need to file there)


Thank you guys for the responses, the state's publications are so confusing. The state with an income tax is Illinois who told me "Our tax system is based on intentions. However, we will look to legal residency also."

1) I am going to move to the non-taxing state May 25th and will be there until October. Then I will be back in Illinois from October until May of next year. After which I will be moving to the non-taxing state. I work as an RA during the year in Illinois so I make about $2000.

Thanks guys!
You will need to file in Illinois
You're probably gonna owe some taxes in Illinois


Thanks! Just so I am clear, I will have to report all of my income for the year right? So I should probably figure out how to do estimated payments since the other state won't withhold?

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dingbat
Posts: 4976
Joined: Wed Jan 11, 2012 9:12 pm

Re: Tax Question

Postby dingbat » Tue May 01, 2012 10:44 pm

0L Hoping for 1 wrote:
dingbat wrote:
0L Hoping for 1 wrote:
dingbat wrote:Two questions:

1) will you move to said no income tax state when you start your job?
Specifically, will you earn any income while still a resident of the first state?

2) when will you move?
More specifically, will you move to the new state prior to the end of June?

Basically, if you live in state A less than half a year (181 days, I think) and earn no income while a resident of state A, you will not owe any income tax to state A (although you may need to file there)


Thank you guys for the responses, the state's publications are so confusing. The state with an income tax is Illinois who told me "Our tax system is based on intentions. However, we will look to legal residency also."

1) I am going to move to the non-taxing state May 25th and will be there until October. Then I will be back in Illinois from October until May of next year. After which I will be moving to the non-taxing state. I work as an RA during the year in Illinois so I make about $2000.

Thanks guys!
You will need to file in Illinois
You're probably gonna owe some taxes in Illinois


Thanks! Just so I am clear, I will have to report all of my income for the year right? So I should probably figure out how to do estimated payments since the other state won't withhold?

You should find out what the exact rules are before doing anything - including requirements re estimated payments

I'm only telling you what I know based on my own and my friends' experiences




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