Hello
I was living in and working in North Carolina in 2016. In August I got a new job in Atlanta, GA but I kept my residency in NC as we had to sell our house before move.
From August 2016 onward I was traveling to Atlanta every Monday morning and coming back to North Carolina on Friday evening. I also rented a place to live in Atlanta, GA.
Questions
1. Can I deduct my traveling to and forth from North Carolina to Atlanta, GA as an employment expense? Of course I will not deduct the daily commute within Atlanta for work.
2. Similarly, can I deduce the expense of renting a room in Atlanta to stay as my primary residence was still in North Carolina?
3. On W2 I got for my job in Atlanta, the state listed is still NC. I still should pay GA taxes too right?
Any other pointer will be very helpful.
1. Commuting, regardless of distance, is Not deductible.
2. When you took a permanent/indefinite job in Atlanta, ATL became your 'Tax Home' - thus, no deduction for lodging.
3. Yes you'll have to file two part-year returns: NC and GA ...
See https://www.irs.gov/publications/p463/index.html for 'Tax Home' definitions and examples ...
Slightly different situation. Live in NC, office address is in Atl GA. I work that job from my home in NC. I don’t and won’t go to GA. Work takes out GA income tax and no NC income tax. Thoughts?
Generally, you owe tax to the state where you live and to the state(s) where you physically work. However, your employer took out GA taxes because you probably did not tell them not to.
To address this, you will file a GA nonresident return to recover your withholding and a NC resident return. Do your GA return first in TurboTax.
You should immediately ask your employer to stop withholding GA taxes on the grounds that you have no GA source income (because you aren't physically working there). You can ask your employer if they will withhold NC taxes for you but they may not be willing to.
In this case, you will need to make estimated tax payments quarterly to NC to avoid an underpayment of estimated tax penalty.
Questions?