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Filing Taxes in 2 States VA and IN

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cyrus006

Junior Member
HI,

I live in Indiana and went to work for a company in VA for a several months in 2006. Now I got W-2 from VA and a 1099 in Indiana. My wife has got W-2 from IN.

I got myself a copy of TaxCut with VA and IN, but it says I owe substantial taxes in both states. How can that be? I have paid taxes to both states on my W-2. I should only owe Indiana on my 1099 income.

Which state do I complete first. IT seems I must file for VA and then use that to get credit in IN? Do I even state my IN income in my VA tax? TaXcut automatically imports it from the federal return and I've not figured out what the deal is. Should I just do a paper return?

Any help would be appreciated.

Cyrus
 


tranquility

Senior Member
I can't tell you how your taxes can be properly prepared through taxcut, but I would think the following is true.

You will be taxed in VA for the time you worked there. You will get a credit in Indiana for the taxes paid in VA. Probably, your VA taxes will be based on your percentage of the income earned there to your total income and you pay taxes on that. Then your amount paid will go against your Indiana taxes, which are your responsibility because you are a resident of that state.

That's just the general way it's done. There may be specific issues between the two states that I don't know as I don't do returns from there. If you can't work it out, you may find it valuable to go to a professional. The problem is fairly easy for one with experience with the interaction between those particular states.
 

LdiJ

Senior Member
I agree with Tranq, and will add that you will be filing as an Indiana resident, but you will be filing your VA return as a non-resident.

Sometimes the online programs aren't well equiped to deal with those kinds of state issues. You may want to call technical support.
 

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