Apparently we do not learn that many real world skills in high school. Recently I received three w-2 forms in the mail. One from a job I held in Pennsylvania, another from my New Jersey employer and the third from my current employer in New York. The PA and NJ jobs are seasonal so I am still on the payroll at both. To further complicate the issue, I have held residency only in PA over the past two years.
The problem is that I do not know how to even begin to approach the task of filing taxes with three states. Prior to this, I did not earn nearly enough for this to be an issue so I really have no background experience to go on.
Do I have to file taxes with all three states separately? How will this affect my federal taxes? Should I just find an accountant and not worry so much?
I have done a great deal of searching over the past few days but most of the places I have found with useful information assume that you know what is going on and leave out the basics. I guess what I really need is a simplified explanation of taxes (if that is even possible). Thanks in advance.
For the federal taxes, just enter the three W2s and/or just add the various amounts. (Electronic filing generally wants you to enter each W2, but paper filing just has you add the amounts and mail in the appropriate portion of each W2.)
For the states, each state’s process will be slightly different. The electronic filing methods can walk you through this pretty painlessly. You’ll just need to designate one state as where your primary residence was. Otherwise, you should be able to find forms and instructions at the states’ websites.
I’m guessing your AGI will be under the $50,000 limit for free online filing. Head over to www.irs.gov and as they say, check out Free File (top center of the page) H&R Block will probably be available for free Federal filing, and the states will probably cost $9.95 each. MUCH cheaper than an accountant, and taking a couple hours to go through the process will be a very good life experience.
Multi-state returns are not at all uncommon in your part of the country.
Disclaimer: I am not an accountant, tax attorney, or any other type of monetary-enabled person. The view expressed below should be taken with several large grains of salt, and may have several wrinkle based on your specific situation. I am speaking below in the broadest generalities, and you should consult the appropriate state revenue departments for further details.
I’m not entirely clear on what your exact situation is, but having done a couple of inter-jurisdicitional returns I can speak in general terms: In general, states will allow you to file a return as a “resident”, “non-resident”, and sometimes “part-year resident” (the last being applicable if you moved partway through the year.) What you’ll probably end up having to do is to file tax returns in all three states; you’ll claim to be a resident of one of the three states, and a non-resident of the other two.
If you are a non-resident of a state, you are generally only taxed on money you received from sources in that state; if you’re a resident of a state, you are usually taxed on the income from all sources, although you may be able to deduct taxes paid to other states from the tax bill for your state of residence.
Beyond that, the specifics of your situation are going to depend on which state you’re a resident of. Figuring out exactly what to do is going to take some careful reading of the information available on the state revenue agencies’ websites, and if you’re not big on slow, careful, picayune interpretation of tax instructions, it might be worth your while to hire an accountant.
