AGI amounts; worked in 2 states, Resident in 1 only, how do I tackle this?

[soCAL]

Ok so the story is I am a resident of CA and I worked in CT for a few months last year, but then returned to CA as it was temporary work only.

So for ease of use, let's say I made $50,000 last year total. $20,000 was made in CT and $30,000 was made in CA.

I am using tax act software and when I filled out my W2 via the forms, I put which in states made which amount on the W2 forms, but then when I got to filling out forms for CA and CT, it displayed my state adjusted income on both states to be the same as my federal adjusted income. Would this be correct? Logically to me it would seem my AGI would be different for both CA and CT but would equal my Federal AGI.

I've looked and looked online, but haven't really found the answers I am looking for about where to make the adjustments or deductions.

For CT I filled out the FORM CT-1040NR/PY.

My Federal AGI matches my CT AGI (lines 1 and 5) as the deductions and adjustments listed above didn't seem to apply to my via the questions I answered in the tax act software. I did fill out a CT-SI saying what I actually earned in CT (in the case above, in which I made $20,000 in CT; the number on line 6 would say $20,000)

My Question for this is, is this the correct approach for telling CT how much I earned in the state of CT, instead of trying to adjust the AGI?

For CA I filled out the FORM 540 and Schedule S.

For line 12 (state wages from your W-2 forms, box 16) Taxact has again supplied my federal AGI (ie: $50,000) instead of my actual CA earnings (ie: $30,00). Seeing no way to adjust this via the software, I did some research and learned I could fill out a Schedule S for double taxation of taxes. So I entered the difference there, based on my CT earnings and my wages withholding in CT. Now I didn't actually pay double taxes to CA, I only paid to CT, however, since it seems that state form is acting like I should pay money to CA on that money (as it looks like I didn't pay CA tax amounts on it at all) I decided this was probably the right way to address it.

Is that a correct assessment? Or is there someway I should try to correct the AGI of CA and CT to be what was actually paid to each state?

I have emailed tax act about this a number of times, but they are not open on the weekend and to give this an even more fun twist, I live out of the country and they have a huge time difference on me, and can only email and wait for answers because of it. Their answers haven't really be all the helpful to me as I am still clearly very confused, although they did make some suggestions, but don't seem to answer all my questions.

Thank you very much for any insight you can give me on this.

[rfassett]

At the risk of sounding insulting, which I am not attempting to do, hire a professional. You are in way over your head and the professional is trained in these areas and deals with them on a regular basis.

[jainen]

>>my state adjusted income on both states to be the same as my federal adjusted income<<

As rfassett advises, multi-state returns are an advanced topic best referred to a tax professional. Your software can not work properly if you don't know how to apply the various tax laws, and you obviously have not even understood the basic instructions. Here are some general principles for working with your preparer. The actual laws are very detailed, but they are fair unless you cheat yourself.

California and Conneticut have similar but not identical laws. Each taxes its own residents on world-wide income. In your case, that means California taxes your Conneticut income exactly the same as if it were earned in California. It then allows a credit for CT taxes. There are two important implications to this. First, although you are not double-taxed, you don't save any money by working in a state with a lower tax rate. Your total California tax is the same. You just pay part of it to Conneticut instead. Second, since the CT income is added to CA you may end up in a higher tax bracket, just like if you earned the extra income at home.

Now, according to the Conneticut instructions for non-residents at http://www.ct.gov/dr...nrpybooklet.pdf, "You must calculate the tax in the same manner as a resident individual. Then, prorate the tax based upon the percentage of your Connecticut adjusted gross income derived from or connected with Connecticut sources." This means that CT also sets your tax rate based on world-wide income including what you earned in CA. After determining the total tax their own residents would have to pay, it then calculates how much your CT wages contribute to that. In other words, nobody gives you any breaks.

Both states use the federal AGI, adjusted only for differences between state and federal law. I don't know your specific circumstances; that's why you need a professional. For example, state tax refunds are sometimes included in federal AGI but would be subtracted out for Conneticut or California AGI. Get some help.

[Jack from Ohio]

...I am using tax act software and when I filled out my W2 via the forms, I put which in states made which amount on the W2 forms, but then when I got to filling out forms for CA and CT, it displayed my state adjusted income on both states to be the same as my federal adjusted income....

...I've looked and looked online, but haven't really found the answers I am looking for about where to make the adjustments or deductions.....

...I have emailed tax act about this a number of times, but they are not open on the weekend and to give this an even more fun twist, I live out of the country and they have a huge time difference on me, and can only email and wait for answers because of it. Their answers haven't really be all the helpful to me as I am still clearly very confused, although they did make some suggestions, but don't seem to answer all my questions....

You are way to late to try to get things done timely.

Your situation is why DO IT YOURSELF TAX SOFTWARE is good for my business.

Seek out the help of a trained professional. I understand Barbers and Cosmetoligists are known to give tax information out for free.

If you want USEFUL and ACCURATE help... Seek out a properly experienced and trained TAX professional.

NUFF SAID!

[MAMalody]

Before you get upset, go back and read jainen's response and then go and look at how your return was prepared. See if the adjustments that jainen referred to were made. It may be that your sofware computed the taxes correctly. Now, having said that, you may want to take you info tomorrow am to a local professional versed in multiple state returns and see if he will try to work it in his schedule.

[soCAL]

For the record, I have always been happy to pay someone to do my taxes for me, and this is the first year I've had to do them on my own. The only reason I ended up having to do them on my own is because I was turned away from four different tax advisors. Mostly because I didn't move back to CA until part of the way through Feb. and I think when they realized how long the taxes would take they realized they were too busy already with other clients to take me on. I think they probably make more money off doing taxes for more people that have easier taxes than dealing with one individual who changes jobs all the time, opened up a business, had 1099s and worked in two states.

I decided because of my hectic schedule (I work very long hours most of the year as I'm self employed, and the field I work in works 12-15 hour days 6-7 day weeks often) and because I had to move overseas while in the process of doing my taxes, that a tax software might be easiest. I was really very wrong, and wish my circumstances could of been different, and have definitely learned my lesson. That said I did do a lot of research and regularly emailed the the people from my tax software to make sure I was doing it properly. I also had four years worth of prepared returns to look at as a basis to follow, but this was the first year I worked out of state, so I had nothing to compare for that.

Thank you to Jainen for your reply. I gather from this that what I thought would be the case, and what actually is the case are two different things, but in working with-in the tax software and from my research online, I feel more confident that I applied everything correctly. I had kept my state AGIs the same as my federal, but I wasn't sure if it was correct or not.

I'd never would of posted, except I came across this mb through my research and thought I'd give it a go. Since I now live out of the country it's not that easy to find someone to help, and it takes a while to receive replies sometimes from taxact.

My taxes are completed, I just wanted to make sure they were right.

Thanks very much.

[joanmcq]

You see, now if you had posted earlier, you might have found a tax pro that thrives on this kind of thing (waves hand) and thinks multi-state tax is fun and challenging. Not to mention SE foreign tax issues. You won't pay bottom dollar, but you will get good work and not be stressing on Oct. 16. Unless of course, you wait until Oct. 15 to contact said tax pro.

All in, I hope you could understand jainen's explaination. We're both in CA, and CA does get a bit complex. It looks as if you did 'get it' to the point where you can file. Being overseas makes things more difficult, but with the magic of the internet & email, it is possible to work remotely.