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Posted by enribadeneira on January 31, 2008, 2:31 pm
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Starting in January, I took a job in Washington DC. Prior to that, my
husband and I both work and live in California. We own a house in
California. My husband is looking for job opportunities in Washington
DC. Until that happens, I will be living in temporary places in DC.
We would like to continue filing our taxes jointly, but I don't know
how to address the income tax issue. Is my income in DC taxable in
California, and vice versa is my husband's income taxable in DC?
Does it matter if I don't have a permanent residence in DC? Does DC
have any agreements with DC such that we can just file jointly in CA
and not file in DC?
I won't have a permanent mailing address in DC for while, so I can
send my W-2 to my CA address or to a friend's address in Maryland or
Virginia? Does it matter where I have my W-2 mail to?
--
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Posted by Paul Thomas, CPA on January 31, 2008, 3:54 pm
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> Starting in January, I took a job in Washington DC. Prior to that, my
> husband and I both work and live in California. We own a house in
> California. My husband is looking for job opportunities in Washington
> DC. Until that happens, I will be living in temporary places in DC.
>
> We would like to continue filing our taxes jointly, but I don't know
> how to address the income tax issue. Is my income in DC taxable in
> California, and vice versa is my husband's income taxable in DC?
Without looking up the laws for the state/District - yes - but.....They each
should allow for taxes paid to other jurisdictions.
It's most likely that you'll be a part year resident of CA and DC with
different part-year residency for your husband (if he moves by the end of
2008). Either way it works out, if there is income that is subjected to
taxation in both jurisdictions, the residency jurisdiction generally gives a
credit for the tax paid to the non-resident jurisdiction.
It's not going to be simple, so when the time comes, talk to a local CPA or
EA for help.
> Does it matter if I don't have a permanent residence in DC? Does DC
> have any agreements with DC such that we can just file jointly in CA
> and not file in DC?
DC probalby has some kind of agreements with VA and MD, but I doubt they'd
have something with a state as far away as CA.
> I won't have a permanent mailing address in DC for while, so I can
> send my W-2 to my CA address or to a friend's address in Maryland or
> Virginia? Does it matter where I have my W-2 mail to?
Nope. It matters where you were when you earned the income. That physical
spot dictates which state gets to keep the tax. Where you are when you
prepare your return, or where the W-2 gets mailed to is irrelevant.
You should get a PO box, or one of those mail drops at a UPS store so the
IRS, CA, DC, etc and so on can get mail to you. Some address that would be
considered the most permanent.
I live and work in a college town, and the kids who school and party here
also work here. They may live in the dorms or apartments, but they give
mom's address for the W-2's in most cases. Not that I'm implying you should
use mom's address.....they know that the address they're at today, is most
likely not the address they'll be at this summer, which is not going to be
the address they'll be at this fall, or next spring.
--
Paul A. Thomas, CPA
Athens, Georgia
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Phil Marti on January 31, 2008, 4:10 pm
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> Starting in January, I took a job in Washington DC. Prior to that, my
> husband and I both work and live in California. We own a house in
> California. My husband is looking for job opportunities in Washington
> DC. Until that happens, I will be living in temporary places in DC.
>
> We would like to continue filing our taxes jointly, but I don't know
> how to address the income tax issue. Is my income in DC taxable in
> California, and vice versa is my husband's income taxable in DC?
> Does it matter if I don't have a permanent residence in DC? Does DC
> have any agreements with DC such that we can just file jointly in CA
> and not file in DC?
Unless you're in one of the governmental or quasi-governmental jobs that
exempts you from DC income tax, which I assume you aren't, you will pay DC
income tax on your DC income if you live in DC. (If you are working in DC
and living in MD or VA, you pay income tax only to the juridsiction in which
you live. At the moment you are a resident of DC/MD/VA and your husband is
a resident of CA, regardless of the fact that you have no permanent
residence in the DC area.
Things are simple for 2007 since both you and your husband were full-year CA
residents. For at least part of 2008 your husband will be a resident of CA
and you will not. Look to the CA and applicable DC/VA/MD instructions for
your options on dealing with this when you file your 2008 returns a year
from now.
> I won't have a permanent mailing address in DC for while, so I can
> send my W-2 to my CA address or to a friend's address in Maryland or
> Virginia? Does it matter where I have my W-2 mail to?
Taking you at word that you're talking about the W-2, have it sent where
it's the easiest for you to get your hands on it when you prepare your
return. Since I assume you already have your 2007 W-2, it's a little
premature to be worrying about where you will have your 2008 W-2 sent a year
from now. The mailing address on it is immaterial.
--
Phil Marti
Clarksburg, MD
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by removeps-groups@yahoo.com on January 31, 2008, 6:54 pm
Please log in for more thread options On Jan 31, 11:31 am, enribadene...@gmail.com wrote:
> We would like to continue filing our taxes jointly, but I don't know
> how to address the income tax issue. Is my income in DC taxable in
> California, and vice versa is my husband's income taxable in DC?
> Does it matter if I don't have a permanent residence in DC? Does DC
> have any agreements with DC such that we can just file jointly in CA
> and not file in DC?
I wonder if this will be complicated because of community property
rules. Here's is what I'm thinking of:
Say your husband makes 75k and you 100k. On 540NR which is at
http://www.ftb.ca.gov/forms/07_forms/07_540nrlong.pdf, you figure the
tax on 175k minus deductions (line 20). Then divide that by 175k
minus deductions to get the ratio (line 23), and multiply it by the CA
taxable income (line 22). I'm guessing the CA taxable income is 75k +
100k/2 = 125k minus deductions.
But DC is not a community property state and will like to tax the full
100k minus deductions. As a result, on your combined income of 175k,
125k + 100k = 225k of it is subject to tax, which doesn't sound
right. IRS publication 555 does not seem to talk about this, but I
might have missed something in it.
As an aside, I notice that in 2001, 540NR calculated the CA tax
differently -- see http://www.ftb.ca.gov/forms/01_forms/01_nr_long.pdf.
You figure the tax on 175k (line 22). But the ratio this time is your
CA AGI divided by Federal AGI (line 25a). Multiply the ratio by your
CA tax (line 25b). I'm not sure what difference this makes.
In any case, 540NR seems unfair because it taxes CA source money at a
higher rate. If you make 1k taxable income in CA, you probably pay 1%
tax only. If you make 1k in CA and 100K outside CA, you pay 9.3% tax
on your 1k CA income.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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