Tax help

[Jon Miller]

OK, so I have an issue I don't understand. I live in VA, but get payed through MD. Where do I pay taxes?

JM

[Lorizael]

Why would you want to live in Virginia?

[Jon Miller]

I have to.

JM

[LordShiva]

Originally posted by Lorizael
Why would you want to live in Virginia?

He's just waiting for teh right woman.

[flash9286]

Virginia and Maryland UPDATE Reciprocal Income Tax Agreement


On December 7, 2006, Virginia and Maryland signed a reciprocal agreement concerning individual income tax. This agreement supersedes a similar agreement dated August 24, 1992, that was effective for taxable years beginning after December 31, 1991.

Under the reciprocal agreement, Virginia residents who work in Maryland are exempt from Maryland income tax on compensation earned in Maryland. Maryland residents earning compensation in Virginia are similarly exempted from Virginia income tax. The 2006 agreement makes two changes that clarify the 1992 reciprocal agreement.

(i) Those who maintain a place of abode in the state for an aggregate of 183 days or more are considered residents of that state.

(ii) The reciprocal agreement applies only to compensation. Maryland residents who have income from a business, rental property, or other activity in Virginia must file a Virginia income tax return and pay tax on that income.

These changes are consistent with the way that Virginia has been administering the 1992 agreement with Maryland since its inception.

If you have additional questions, please contact the Department of Taxation at (804) 367-8031 for individuals or (804) 367-8037 for employers with questions about withholding.

http://www.policylibrary.tax.virginia.gov/OTP/policy.nsf/c8fb8e1da80997e68525689b00694d3b/b320e200211d53b585257258005933d2?OpenDocument

Do this help?

[snoopy369]

Based on Flash's answer, you would pay taxes in Virginia.

Normally you would pay taxes in both but get an exemption for the taxes paid in the non-resident state in the resident state, IIRC. But thanks to the deal above, you only pay in Virginia.

[Jon Miller]

Maybe, depends on what compensation is. Basically, I had been living in VA for a while. I changed my address at my place of work (University of Maryland) last January, and they stopped pulling state taxes out. So I have 91.50 pulled out on MD tax (basically what was pulled out from one pay check). I have been living in VA the whole time, so I think that means I need to pay taxes in VA.

I do have friends and a mailbox I could use in MD, if that is easier. But I have really been living down here in VA.

JM

[snoopy369]

You should file taxes in both, I think, and claim a refund of all MD taxes paid (file 0 income 91.50 taxes paid). But that's probably worth waiting for a definite answer, as I'm not certain.

[Jon Miller]

Originally posted by snoopy369
Normally you would pay taxes in both but get an exemption for the taxes paid in the non-resident state in the resident state, IIRC.

See, that sounds really complicated, and like something that I would want to get help on (like maybe even go to an accountant).

JM

[snoopy369]

http://individuals.marylandtaxes.com/incometax/partyear.asp

That explains the Part-Year residence in MD; basically file in MD like normal (in addition to VA filling) and on line 13 put your income in VA.

It's not particularly complicated, actually, this is very common so there are sites like the linked one here that explain it

Basically if you made $30,000 and $1,000 was while living in MD and $29,000 was while living in VA, you would file in MD with:

Income (line 1): $30,000

Income while living in another state: $29,000

---
Adjusted income: $1,000
Tax taken out: 91.50

Refund: whatever

And you could do the same in Virginia, I believe, taking the $1,000 out as a subtraction.

Once you (next year) are full-year resident of VA, you will only pay taxes in VA.

[Jon Miller]

But I have actually lived in VA the whole year, I just waited until January 11th or so to tell my place of employment that.

edit: I actually screwed up the previous year and filed all my taxes in MD despite living some of the time in VA.

JM

[snoopy369]

Then put $30,000 on line 13 as 'income from other states' and claim all $91.50 as refund.

[Jon Miller]

Thanks Snoopy

JM

[Kuciwalker]

Originally posted by Lorizael
Why would you want to live in Virginia?

NOVA > MD.

[pchang]

Using an accountant

would not be worth it for you. the accountant would help you get back a refund of $91.50 from MD, but at a cost much greater than $91.50.