mcass202

Hi. Its our 2nd year filing jointly but not sure what is in our best interest re tax.

We moved to NJ in June 2009 but my US Citizen wife continued to work in NY as an independent contractor (1099) until her job ended in March 1st 2010. (her commute worked out shorter from here than Queens ironically)

All her info is registered to her parents address in Long Island, NY (the address we used to file last year..and our permanent address with USCIS). We are currently staying with my family in NJ temporarily. She earned around 19,500 and I was unemployed.

Should we be filing in NJ or NY State?

Also, does anyone know where we can find out what deductions she would be able to claim?

Thanks in advance.

Rete

Print out the 1040 instruction sheets. It lists what is deductible and what isn't.

Hire a tax accountant to do your taxes or use turbo tax.

Unless she has a large amount to deduct in medical bills, i.e. anything over 7% of her income, charitable deductions, interest on a mortgage, she probably is better off just using the standard deductions.

Bob

1099....she should have been filing quarterly...

md95065

If she earned "around $19,500" it would be appropriate to figure out *exactly* what her gross income was, because the threshold for having to file at all is $18,700 for a married couple under 65 filing jointly.

Noorah101

My husband and I live in Arizona. We both earn income and file a joint tax return. My job is in Arizona and I get a W-2 statement. My husband is an independent contractor and works a lot in California. He receives 1099's. The business is registered and located in Arizona, but his physical body goes to California to do the work because that's where his clients are located.

We file a joint federal return, and an Arizona state return. We have to file a Californa tax return because the income he earns is from that state, but we only have to prove we live in Arizona and pay state tax in Arizona. We don't have to pay tax in both states, but we have to file both state returns.

Just thought I'd share since it seems to be a similar scenario.

Rene

tonrob

Not sure about if/how the self-employed bit might make a difference, but I live in MA and work in CT and I have to file in both states.

discoviking

I second the advice to see a tax professional. They should be able to identify where you need to file, and also which deductions you are legally entitled to. There are different deductions available to you when you are self employed versus being an employee. If you are self employed, (1099), you also as a rule of thumb need to file quarterly returns using a 1040 EZ form, (both state and federal), with a payment based on your estimated yearly income. You can also file more frequently than that if you wish, neither the IRS nor the state treasury will have an objection. When I worked as an independent contractor a few years back, I used to send in a payment based on my estimated tax bracket (with a 1040EZ) each month when I got paid, rather than ending up with a larger quarterly payment.

When you are self employed, it does not matter where you perform your contractual work, your home address is considered your actual place of work, and you file taxes accordingly. This is why commuting costs are tax deductible when you are self employed.

I have also been through various combinations of living in NJ and working in NY, as an employee. In that scenario, your employer will deduct your federal tax, and state tax for the state where you are employed. You also have to file a tax return for the state you reside in.

For example, when I lived in NJ and was employed in NY, the employer would deduct federal and NY income tax. I would file federal, NY and NJ tax returns, but the paid NY income tax would be deducted against my NJ tax liability.

If you are employed in New York City, you also have to file a NYC tax return, as they also charge income tax on top of the NY state income tax.

The various scenarios here in the tri-state area can be rather complex, so it is a good idea to hire a tax professional to figure it all out for you. Also keep in mind that the resident definitions for tax purposes are not necessarily the same as the resident definitions for immigration purposes. Personally I have used a friend of mine who happens to be an experienced tax attorney to do my return for several years now. A few perfectly legitimate deductions I would never have thought of have been identified that way.

Peter Newton

It sounds to me that you would have to file in BOTH states. The NJ return would be a resident return, and the NY return would be a part year/nonresident return.

Noorah101

I should have mentioned that we have a CPA doing our taxes, also. I agree with getting a tax consultant or CPA advice on this one.

Rene