Estimated Taxes when getting married and moving states

[danaphanous]

Hello, 

I have tried to research this, but I can't find a Q&A on my situation exactly so apologize if this is a repeat. 

I have 2 unusual events this year: This year I and my fiancee are both concluding positions in CT, getting married, taking a month break for a honeymoon, and then moving and starting jobs in TN. My question is how exactly this will affect my taxes as we both have multiple sources of income, some of which require estimated taxes in CT. 

From my understanding it will be best for us to file jointly as this will simplify things. TN has no income tax so that makes it easy. Should we pay our estimated taxes in April 15, June 15 separately on our own 1099-miscs to CT and then add that together for the joint return end of year in a part-year return to CT? Do I only pay 2 quarterly estimated tax payments even though there are normally 4? I plan to declare residency in TN as soon as we move and will be making no income in CT for July onward during the honeymoon before the move in early August. Couldn't find a clear answer from google on if CT will complain that they only got 2 estimated tax payments when I will not declare residency until August, but at least on the income side there is no income in CT other than a dividend or two in July onwards so if I break it down by paystub date it should be straightforward. I use TurboTax premier for my rental and self employment income. Usually for estimated taxes I just pay 4 payments of 1/4 of what I paid last year, but because of the move and a higher than normal tax bill last year I would overpay my CT tax by nearly 3x if I did it this way. Plus if I make estimated payments after my move I worry they may claim I didn't actually move. I think I should pay 2 payments of 100% of what I estimate I will owe, though it is difficult to tell what tax rate they will assign me exactly as the new job in TN will be high paying but I wont' know the exact amounts we will be getting until after April 15, which is when the first estimated payment is due. 

Is there anything else about my situation that I should know since we will be switching to married filing jointly? I don't think I have questions on the Federal tax side because I am just paying in estimated taxes 1/4 of what I paid last year, however, if there is some special rule where we have to pay 1/4 of our combined previous income please let me know. 

[JulieS · Accepted solution]

Yes, in general, filing jointly provides the most tax benefits.

Regarding Connecticut estimated payments, you are just required to pay enough so that when you file, you owe $200 or less. I think you should pay your CT estimates separately and that you can stop when you move out of CT. 

Regarding your federal estimates, you can continue to pay them separately for this year, if that is easier. For federal as long as you pay enough that you don't owe more than $1000 when you file, you are good.

Ideally your estimates should be the same amount each quarter, but if you feel like your income has increased more than you expected, you can increase your payment toward the end of the year. 

You should also be aware that your taxes withheld from your pay are considered to be paid evenly throughout the year, so make sure you have enough tax withheld from your salary. 

There are no special rules for newly married taxpayers with regard to estimated payments. If you find you have underpaid at the end of the year, it is easier to get out of any penalties because your tax situation has changed so much since last year. 

Congratulations and good luck!

[danaphanous]

Thank you! We will make the best estimates we can then, pay estimated CT taxes separately for 2 quarters, and assume the higher end for CT tax rates on the miscellaneous income as our income is going up in TN. 

I guess if I find that I underpaid, rather than increasing estimated payments, I can start the new position with a higher withholding amount on my W4 as well?

[JohnB5677]

Yes, you can prepare a W-4 in TurboTax.

1. On the menu bar on the left that shows.
   1. My Info
   2. Federal
   3. State
   4. Review
   5. File
2. Select Tax Tools
3. On the drop-down select Tools
4. There will be 4 green boxes
5. Select Tax Topics
6. Type W-4

This will bring you to the right section.