Your Life

Your Life

Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.

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Pioneer
Posts: 1
Registered: ‎05-07-2018

State Tax

Living in one state and working in another? Can this pose an issue or potential problem for yearly tax payments?

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Associate (Neighbor)
Posts: 220
Registered: ‎07-22-2014

Re: State Tax

Hello, CDanne1, and welcome to the community.

 

Living in one state and working in another shouldn't pose any issues.  I would check with your employer to see which state they are withholding state tax for...if they are not withholding for the state where you live, then you will end up filing two state returns next year.  Most states have a form that can be completed to give you credit for income tax paid to another state; if your home state has a higher income tax rate than the state where you work, you may end up with a balance due.  (Example - if you live in Minnesota, but work in Wisconsin, you would end up with a balance due to MN, since their income tax rates are higher than they are in WI.)

 

Hope that helps!

 

-kurt