Married couple living in different states, filing jointly. Spouse does not work. When filing her state return, it captures my W2 and says we owe money. How to avoid this?

[JohnB5677]

Although it can vary (slightly) by state, generally speaking, the state filing instructions invariably say to attach pages 1 and 2 of your Form 1040 (or 1040A) or just the first page of your Form 1040EZ.

You can confirm this on this List of Department of Revenue by state  List of state DOR's

[gur1]

Request inputs on below.Thanks

 I  am planning to file a federal tax return as Married filing jointly and state tax as  Married filing separate using the below steps

https://ttlc.intuit.com/community/using-turbotax/help/how-do-i-prepare-a-joint-federal-return-and-se...

1 The link details how to file joint tax return and separate tax returns but it does not clarify when filing state tax return for primary which federal return should be attached to state tax   Married filing joint federal tax return or Married filing separate Federal tax return?

2 Do I need to paper file state return ?

3 I am resident in IL and my spouse moved out of IL in July 2021to Canada. She was not working when she was in IL and the only income she has is from bank interest which is around 27$. Does she require to file a state tax return? Should state return  filed as a part resident for her 

 

[gur1]

Hi @KrisD15 @JohnB5677  @MarilynG 

Request inputs on below.Thanks

 I  am planning to file a federal tax return as Married filing jointly and state tax as  Married filing separate using the below steps

https://ttlc.intuit.com/community/using-turbotax/help/how-do-i-prepare-a-joint-federal-return-and-se...

1 The link details how to file a married filing jointly federal joint tax return and married filing separately state tax return but it does not clarify when filing state tax return for primary which federal return should be attached to state tax . Should be Married file joint federal tax return or Married file separate Federal tax return(Mock)?

2 Do I need to paper file the state return?

3 I am resident in IL and my spouse moved out of IL in July 2021to Canada. She was not working when she was in IL and the only income she has is from bank interest which is around 27$. Does she require to file a state tax return? Should the state return  filed as a part resident for her 

[AmyC]

1 & 2. You can e-file IL alone. IL may ask for a copy of your federal return. If so, send them the MFJ return.

3. Most likely. See IL filing requirements which states: a part-year resident , you must file Form IL-1040 and Schedule NR, Nonresident and Part-Year Resident Computation of Illinois Tax, if

• you earned income from any source while you were a resident,
• you earned income from Illinois sources while you were not a resident, or
• you want a refund of any Illinois Income Tax withheld.

@gur1

[npdd84]

My spouse work in MS and I work in AL, we both live in AL. Can i use the MFJ for federal and MFS for states?  How do i fill for state?  

[MarilynG]

You should file as Married Filing Jointly for your Alabama Resident state return, since you are both Alabama residents.

Alabama will tax all of your income (no matter where it was earned), but give you a credit for any tax you paid to Mississippi.  

If this is shown on your W-2, TurboTax will pick that up when you enter your W-2, and you will see a screen in the Alabama State interview about 'taxes paid to another state'.   

If the amount is not filled in for you already, you can enter the tax you paid to MS there.

Here's steps for How to File a Non-Resident State Return for Mississippi.  You can file jointly there, too.  In the state interview, you will be able to indicate what amount of your total Federal income was earned in MS as a Non-Resident. 

[npdd84]

Thanks MarilynG:  But that was what i did,  however, Turbotax show that we owe money to MS.  Before adding my income to MFJ, my spouse received a credit from MS, but after adding my income, we owe MS money. 

[MarilynG]

You want to make sure your MS return only shows the Mississippi income.  Make sure you indicated that both of you are non-residents.

Mississippi takes your total income and divides by your MS income, to figure a %.  For example, if you earned a total income of 40K, and 10K was earned in MS, then 25% of your income would be taxable in Mississippi. 

You should get a screen in the MS interview that shows 'Federal Income' (total for you both) and a place to enter 'Mississippi income' (where you would enter only MS amount).

Here's a copy of Mississippi Form for Non-Residents that may help you to check the calculations.  

You may want to delete your states and go through the MS interview first.  If the amount of MS tax withheld is correct on your W-2, you should reasonably 'break even' with MS, or get a small refund.  However, if not enough MS tax was withheld by your employer for the MS income, you could still owe tax on this income to MS.  However, you are correct that you should not owe just by including a 'non-MS' W-2. 

Since we can't see your return in this forum, you can Contact TurboTax Support for help. 

[Every year]

On page one of this thread, two experts offered different solutions. One advised submitting a mock Married Filing Separately federal return that corresponded to each of the MFS state returns and another advised submitting the actually filed Married Filing Jointly federal return with the MFS state returns. This is for a situation with one married resident of California and a spouse resident of Iowa. Any thoughts on this?

[AmyC]

CA and Iowa. CA is the big concern since it is community property. See  Married/RDP filing separately | FTB.ca.gov. First, it must be determined if you  meet all the conditions to file separately claiming all of your income or if you would both need to file a return each claiming your half of the income.  Determine if you are actually better to file a MFJ return and only claim CA income or if you really want to file MFS.

Iowa- filing status -allows MFJ while only claiming income from Iowa. It also allows MFS with two options, combined on same return or separate.

Honestly, my guess would be that you should file MFJ for all 3 states. Review your situation and the rules before making a decision.

@Every year

[Every year]

Thank you. We have no income other than my pension, a small gain from the sale of stock, and both of our Social Security payments.  There is a tax saving realized for MFS for both states which is why I would like to file MFS. Any ideas about the original question?

[Every year]

Thanks. I just found an error that drove my California tax rate up for MFJ. I got it.

[michelleq84]

Hi, I’m in a similar situation and I want to know which is the best way to file. I have an apartment and work in Tennessee (no income tax) and my husband owns a home and works in Arkansas (income tax). My name is on the deed for the home in AR, but I maintain a TN residence for my job (I have to live in TN as a job requirement).  
1. Should we file federal MFJ?

2. How should he file his state in AR?

3. Do I have to file as a non-resident for AR? Do I owe taxes in AR?

[RaviYen]

Hi, 

I went thru this entire thread and need some guidance. 

I live and work in Oregon with our son.  My wife moved to WA, in mid 2020 and works and lives there and we visit each other over the weekends. 

I filed MFJ (std deduction) for 2020 for both Fed and OR and didn't do anything for WA as there is no state tax.

For 2021, I filed for an Extension for Federal and did nothing for State as I assumed that States wouldn't require any separate extension.

I'm using TurboTax Desktop software.

I have prepared MFJ for both Fed and OR and ended up with a  big tax owed bill. 

However, when I did MFJ for Fed and Mock MFS data flowed down to OR State returns, I'm getting good money back from both Fed and OR and in previous case(MFJ's case ), OR is taxing my wife's income from WA as well. 

1) Can I go with this approach - MFJ for Fed, MFS for OR. 

2) In that case, do I need to paper file OR State or can I efile using Turbo Tax.  

3) if I efile using TurboTax, I would be sending a wrong Fed return (MFS as against the actual Fed return which is MFJ). 

4) If I paper file, do I need to send the Actual Fed Return(MFJ)

5) Do I need to give any justification to OR for paper filing. 

6) Would paper filing attract more audit risk from OR.

7) OR state says that there is lot of tax fraud between WA and OR and they take more attention to such borderline cases.  Is there anything illegal in this approach. 

Please advise. 

I need to complete the filing asap. Please help.  

I'm ready to pay consultancy charges for these questions and further detailed conversation, if you are ok with it.  

[Hal_Al]

@michelleq84 

Q1. Should we file federal MFJ?

A1. Yes.

Q2. How should he file his state in AR?

A2. Yes

Q3. Do I have to file as a non-resident for AR? Do I owe taxes in AR?

A3. You file a joint Resident AR return. You are both full year resident of AR.  For tax purposes, your TN home is a 2nd home. 

TN does not have an income tax. If your job and 2nd home were in a state with an income tax, the filing situation could be more messy, depending on the state. 

@RaviYen  I'm of the opinion, this applies to your OR-WA  situation as well.