In 2021, I was a full-time MD resident and my new spouse moved from VA to MD. I finished our federal taxes and MD taxes (including subtracting out my wife's non-Maryland income) and it seemed to work fine. I then downloaded VA but when I started it, TurboTax told me I'll need to use "Married filing separate" as my filing status. It says to follow a link for step-by-step instructions on how to do this, but when I click on this it just takes me to the TurboTax Community home page. Did I just waste $45+ on buying VA through TurboTax? Please advise.
Hopefully, these instructions from this Help Article will assist: How do I prepare a joint federal return and separate state returns?
In essence, you will create a "fake" Married Filing Separate return for your spouse because she will need to file a separate VA return, which will need to be mailed in. The Help Article gives more detail.
Hopefully, these instructions from this Help Article will assist: How do I prepare a joint federal return and separate state returns?
In essence, you will create a "fake" Married Filing Separate return for your spouse because she will need to file a separate VA return, which will need to be mailed in. The Help Article gives more detail.
Hi @DanielV01 ,
Hoping to get some quick assistance! We have the Turbotax Software Deluxe (Federal + MD State) + VA State.
OUR TIMELINE
2022
1. Husband lives in MD and is paying income tax for salary in MD
2. Wife lives in VA and is paying income tax for salary in VA
3. Get married in August 2022
4. Wife moves to MD in September 2022
2023
5. Wife changes her name and address in February 2023
6. Wife adjusts employer withholdings from VA to MD (W-4 and MD 507) in March 2023
MARRIED FILING JOINTLY FOR FEDERAL AND SEPARATELY FOR STATE
Having the same issue as @JEM2022 for 2022 and are going through the process of filing jointly for federal and filing separately for the state. Why is our joint federal showing an outrageous amount of state taxes are owed when we complete the federal? Did we overlook something?
RECIPROCAL AGREEMENT
We're confused about this piece too. Does the reciprocal agreement between MD and VA come into play here? If so, how do we move forward in this situation exactly in conjunction with state filing(s)? I'm seeing competing information on whether we both have to complete state forms or just one. In our research, we've also seen the MD Form 505 and Virginia 763-S listed. HELP!
Looking forward to your expertise!
First the easy one. The state taxes shown for your joint federal return do not matter since you are filing separately in the states. The amounts show high because there was no allocation of income between the states. Both states are taxing all income but withholding was only to one state or the other. Again these numbers do matter as you are not filing those joint state returns.
For the MD and VA separate returns. The reciprocal agreement does come into play. Under the agreement you only pay taxes to one state (resident state) even though the income was earned in the other state. Without the agreement in place you would pay taxes in both states but get a credit on your resident state return to mitigate taxes paid to the nonresident state.
First the easy one. For you: Complete a "Mock" federal married filing separate return that will flow to your full-year MD resident return that has only your income and deductions.
Now your wife. Complete a "Mock" federal married filing separate return and indicate her resident state on 31 Dec was MD and she lived in another state (VA) with the date of move entered in the "My Info" section. This will generate a part-year VA and Part-year MD return with only her income/deductions. On each of those part-year returns she will have the opportunity to allocate according to the residence time in each state the income that belongs to each state.
Additionally, since the withholding for VA didn't stop until March 2023, if you want those taxes refunded, your wife will need to file a separate nonresident VA return for 2023 (using "Mock federal separate return again). She will allocate zero to VA since she actually falls under the reciprocal agreement.
In the "My info" section on her 2023 "Mock" return she would be a full-year MD resident but use the "Other State Income" topic to indicate she earned money in another state (VA). This will generate the nonresident forms where she will allocate zero to VA.