Real Estate Agent Resident of Minnesota Made sales in Wisconsin

[dangra25]

Hi Everyone,

I don't know how to handle this, if anyone could chime in it would be greatly appreciated.

I'm a real estate agent, that works for 2 separate brokerages in 2 different states.  I live in Minnesota and that is my main state for business, but I decided to get licensed in Wisconsin this past year and work with another brokerage there and made 2 sales in the Wisconsin. So I received a 1099-NEC from my Wisconsin brokerage and I don't know how to handle it.  I purchased the additional state (WI) in Turbo tax but I have to be doing something incorrect, it is saying I have all my income is taxable in WI, when really its only a very small portion ($20k).  Is there a way to only enter the 1099-NEC for Wisconsin since the other income shouldn't be taxed in WI?

[KrisD15]

First complete your Federal return. 

Next, do the NON-RESIDENT Wisconsin return and be sure to allocate only the commission earned in Wisconsin. 

You should be taxed on only that income on the Wisconsin Non-resident return. 

Finally, do the RESIDENT return for Minnesota. You will claim all your income. You will be taxed on all the income, however you will get a credit for the tax you paid to Wisconsin.

Be sure to follow this order so that the program knows the WI tax to apply as a credit on the MN return. 

Be sure to only allocate the 20,000 to WI. 

[pjn]

Without knowing specifics, you can try to fill in the F1099-NEC's showing the proper address on both input screens for F1099's.  Look for state box if available. Sometimes that should get you the income apportioned when you go to the states.  If it doesn't work, on the Wisconsin state return you should be able to apportion the income between Wis and Minn. I know that for the Pro Series product you can do this manually and it works well. Have not tried in TT but you can give it try. 

Hope it helps!

[dangra25]

So do I need to start over from scratch? Or can I delete both states and add them back? (It says once you delete it can't be undone), plus I have been using turbo tax for 10+ years, it always know to auto pull up MN

So lets say I figure out how to do this in the order you said, how do I allocated just the $20K to WI? When I start the WI state taxes it auto pulls up a flip home I did asking about capital gains, that say has nothing to do with WI

Thanks

Dan 

[TeresaM]

If you are using TurboTax Online, this message will appear when you delete a state. However, the vast majority of the information in the state return is pulled from the federal return, so if you delete it and open it again, it will refresh the data from the federal. Please save any numbers you entered directly into the state return before you delete it. 


 

1. First, please check My Info in the Federal return and be sure the box is checked for Made money in another state
2. Then go to the States section and click on the delete trashcan icon for both Wisconsin and Minnesota
3. Then, add Wisconsin first,  and be sure it is a Non-Resident state and complete it
4. Next, add Minnesota and be sure it is a Resident State
    

• This should prompt the allocation of income in both Wisconsin and Minnesota. Both returns will ask what part of the federal income is sourced in that state, so you can divide the income.
• Then, Minnesota, your resident state, will ask you to enter your taxes paid in Wisconsin to give you credit, so you are not double taxed on the same income. 
  
  Next year it will remember both state returns and prompt if you want to use them again for tax year 2023.
   

[dangra25]

I'm using TT for my desktop, not online.  Will it be the same process?

Another question, I noticed at the bottom of my 1099-NEC, box 6 says Payer's State is listed as Minnesota...does that maybe mean I don't need to file a Wisconsin return?

[ThomasM125]

It doesn't matter where the payer is located, if you received a commission from a sale consumated in Wisconsin, it is considered Wisconsin income. It would be wise to delete the state returns and start them over. The second time around, prepare the Wisconsin return first, as you may need numbers from that return to get a credit for taxes paid there on income also taxed in Minnesota.