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Lived and Worked in Two States: How Do I File My Taxes?

Every year I have several people ask me how to file their taxes if they lived and worked in two different states over the course of the year. The issue arises from the fact that each state appears to tax you based upon the entire income you report on your Federal 1040, thereby resulting in you being double taxed.

Of course, that’s not really the case. For each state, there’s generally a form you need to fill out that allows you to account for the fact that only part of your income for the year was earned while working in that state. The final result from that extra form will be the amount of income you earned while working in that state. This amount will be entered on your state 1040, and this is the amount that the state will tax you on.

So how do you know the name of the extra form you need to fill out? It will tell you on your state 1040.  Phrases to look for include “part-year resident” or “[name of state] income percentage.”

For More Information, See My Related Book:

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Taxes Made Simple: Income Taxes Explained in 100 Pages or Less

Topics Covered in the Book:
  • The difference between deductions, exemptions, and credits,
  • Itemized deductions vs. the standard deduction,
  • Several money-saving deductions and credits and how to make sure you qualify for them,
  • Click here to see the full list.

A testimonial from a reader on Amazon:

"Very easy to read and is a perfect introduction for learning how to do your own taxes. Mike Piper does an excellent job of demystifying complex tax sections and he presents them in an enjoyable and easy to understand way. Highly recommended!"
If you want to discuss this article, I recommend starting a conversation over at the Bogleheads investing forum.
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