Multi-State Tax Compliance | Numerico | Certified Public Accountants Livonia, MI
With multi-state tax compliance, small details matter. At Numerico, we manage the little details before they become significant tax liabilities. We work with our clients to legally minimize their tax liabilities. Numerico provides services in Ann Arbor, Livonia, Northville, and the surrounding areas.
Our CPAs deliver timely and professional personal and business tax advice. We work closely with each client to build a winning tax strategy. Schedule a consultation with one of our trusted CPAs today and find out how we can assist you.
How To File Taxes If You Lived in Two States
The first step in the process will be to assess your residency status in each state. As a part-time resident, you must pay tax on the income that you earned while you lived in the state. This calculation will include income earned from outside the state during this period as well.
You’ve got two options. You may calculate your liability as if you were a full-time resident of the state. You’d then file based on a percentage of this amount. How much would depend on how long you lived in the state.
An alternative would be to assess only the income earned during your residency. You’d then need to prorate any expenses accordingly.
Where this becomes complicated is where you have multiple sources of income. When, for example, you have an e-commerce store, you must account for sales tax in different states. You’ll need to ensure that your multi-state sales tax filing is up to date. This return is entirely separate from your regular business or income tax filing.
Do I Have To File Taxes in More Than One State?
Negotiating the complicated tax regulations across different states is difficult. Do you need to file multi-state tax returns? Do you qualify for a multi-state tax credit? The team at Numerico is standing by to answer all your questions about multi-state tax.
Schedule your appointment today to ensure your complete multi-state tax compliance if you:
- Earned income in different states in the same tax year
- Have a property in a different state
- Are a part-time resident in different states
Whether you’ll have to file separate returns depends upon:
- The states in question
- Whether you’ve changed your employment
- The location of your primary source of income
- If the states have a reciprocity agreement
- Your residency
During your consultation, your CPA will discuss these matters with you. They’ll get all the details necessary for multi-state tax compliance.
How To File Taxes If You Work in A Different State
If you work in a neighboring state, you may need to file two tax returns. You’ll have to establish whether or not the states have a reciprocity agreement. If they don’t, you’ll have to pay taxes in both states.
You’ll have to file a nonresident return for the state in which you’re working most of the time. You must do this first because you’ll need the information when you file your return with your resident state. Your resident state will usually give you a tax credit for any sum that you pay to the other state.
Whether your state allows a credit or not depends on their tax rules and the tax you’ve paid. There are no credits for multi-state sales tax, for example. Our CPAs are here to help you navigate the confusing multi-state tax compliance arena.
Numerico | Your Multi-State Tax Solution Experts | Livonia, MI
Are you a business owner? Speak to our team for your personalized, comprehensive multi-state corporation tax guide and multi-state payroll tax guide. We’ll help you keep your business in the clear.
Contact us today for your personalized tax strategy. We’ll go out of our way to find your legitimate tax savings.