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There are many state tax questions that come up through the course of the year. Tax law, whether it is Federal or state, is not easy to understand, as there are thousands of rules, statutes and laws dealing with the topic. This is complicated even further by the fact that the laws of one state do not necessarily match the laws of another one.
Understanding state tax laws is important when preparing your tax returns. Many states attempt to provide information either online or through information centers design to educate taxpayers.
Do I Have to Report Income Earned in Another State?
If you earned income in another state on a contractual basis or as a former resident, generally you do not have to report that income in the state where you currently live. There are some other factors that go into determining what state you have to pay taxes in but most state tax forms guide you through a question and answer process designed to determine proper reporting.
Advantages
Disadvantages
Do I Have to File Separate Returns if I Move From One State to Another?
Many times a taxpayer is transferred or moves mid-year from 1 state to another. Income earned in 1 state is subject to the income tax laws of the state in which it was earned. This will require the taxpayer to file returns in each state income was earned while a resident.
Advantages
Disadvantages
These are just a few of the every basic questions concerning state taxes and state tax issues. You should consult the Department of Revenue or taxing authority within your state for specific information concerning sales and income taxes. This will provide you with more detailed information that may be specific to a question or concern that you have about your state taxes.
Understanding state tax laws is important when preparing your tax returns. Many states attempt to provide information either online or through information centers design to educate taxpayers.
Do I Have to Report Income Earned in Another State?
If you earned income in another state on a contractual basis or as a former resident, generally you do not have to report that income in the state where you currently live. There are some other factors that go into determining what state you have to pay taxes in but most state tax forms guide you through a question and answer process designed to determine proper reporting.
Advantages
- Income earned in another state is subject to taxation in that state.
- You may have a lower tax rate on the previous income than on current income earned in your new state.
Disadvantages
- Some states may require a determination of whether income earned in another state was paid while a resident of your current state.
- You may need to provide a copy of your former state’s return with your current state tax filing.
Do I Have to File Separate Returns if I Move From One State to Another?
Many times a taxpayer is transferred or moves mid-year from 1 state to another. Income earned in 1 state is subject to the income tax laws of the state in which it was earned. This will require the taxpayer to file returns in each state income was earned while a resident.
Advantages
- You only pay the tax rate of the state in which income was earned.
- It allows you to be current in your tax obligations.
Disadvantages
- You are responsible for obtaining the necessary forms from your former state in order to complete the filing.
- You may be subject to additional tax or penalties if you fail to make the proper filing.
These are just a few of the every basic questions concerning state taxes and state tax issues. You should consult the Department of Revenue or taxing authority within your state for specific information concerning sales and income taxes. This will provide you with more detailed information that may be specific to a question or concern that you have about your state taxes.
