Married Filing Jointly in two separate states


S

satish.grandhi

My Wife and I got married in June'2006. Following is our
situation

Before our marriage my wife had been working in California
with a company.

After marriage she moved to Massachusetts and is working in
MA for the same company.

I have been in MA the whole year & have no income whatsoever
from CA.

We do not have any itemized deductions & do not have any
complex investments/dividends etc.

Following are the queries that I have
1. What are our options filing federal and state taxes?
a) Can we file jointly or separately?
b) What are the options filing for state taxes? (MA & CA)
2. More concerned regarding the state taxes. How do we file
our state taxes? Do we have to file in both the states? If
we want to file jointly how would it work for the state of
CA where my spouse has worked for half the year & for the
state of MA?
3. If we File as Married Filing Jointly in each state but
only for the time lived there how would we report our income
on the Tax Forms. Specifically lets say my spouse earned
"S1" dollars in CA and "S2" dollars in MA and I earned "M"
dollars in MA how would we report these incomes to each
state?

Thanks
 
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P

Phil Marti

My Wife and I got married in June'2006. Following is our
situation

Before our marriage my wife had been working in California
with a company.

After marriage she moved to Massachusetts and is working in
MA for the same company.

I have been in MA the whole year & have no income whatsoever
from CA.

We do not have any itemized deductions & do not have any
complex investments/dividends etc.

Following are the queries that I have
1. What are our options filing federal and state taxes?
a) Can we file jointly or separately?
Yes.

b) What are the options filing for state taxes? (MA & CA)
Check the states' instructions to see if they require the
same filing status for state as you use for Federal.
2. More concerned regarding the state taxes. How do we file
our state taxes? Do we have to file in both the states?
Your wife definitely has a filing requirement as a part-year
resident of both states. You have no CA filing requirement
unless you file a joint Federal return AND CA requires that
joint Federal filers must also file a joint state return.

You can figure everything out by getting both states'
instructions and spending some time. You may find it worth
the money to hire someone to do your 2006 taxes. At this
late date don't expect anyone to get it done by April 17,
but you can get extensions.
 
Last edited by a moderator:
J

John D. Goulden

My Wife and I got married in June'2006. Following is our
situation

Before our marriage my wife had been working in California
with a company.

After marriage she moved to Massachusetts and is working in
MA for the same company.

I have been in MA the whole year & have no income whatsoever
from CA.

We do not have any itemized deductions & do not have any
complex investments/dividends etc.
The trap of MFS is that you BOTH must itemize or NEITHER of
you can. Since you don't have itemized deductions, no
problem. Also, most states require that your filing status
on state returns be the same as on your federal return

If you haven't yet filed your federal return, I would say
that your situation is complicated enough (for example,
she's a part-year resident of two states) that the only way
to know for sure is to work it up both ways and see which
one works out for the best. If you've already filed your
federal return(s), you probably must use that same filing
status on all of your state returns.

MA return, with instructions on what to do if you are filing
jointly as part-year resident + non-resident:
http://www.mass.gov/Ador/docs/dor/Forms/IncTax06/nrpdfs/nr_py.pdf

Useful page on the same topic for CA
http://www.ftb.ca.gov/law/summaries/NonResTxCA_2002S.pdf
 
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K

Katie

My Wife and I got married in June'2006. Following is our
situation

Before our marriage my wife had been working in California
with a company.

After marriage she moved to Massachusetts and is working in
MA for the same company.

I have been in MA the whole year & have no income whatsoever
from CA.

We do not have any itemized deductions & do not have any
complex investments/dividends etc.

Following are the queries that I have
1. What are our options filing federal and state taxes?
a) Can we file jointly or separately?
b) What are the options filing for state taxes? (MA & CA)
2. More concerned regarding the state taxes. How do we file
our state taxes? Do we have to file in both the states? If
we want to file jointly how would it work for the state of
CA where my spouse has worked for half the year & for the
state of MA?
3. If we File as Married Filing Jointly in each state but
only for the time lived there how would we report our income
on the Tax Forms. Specifically lets say my spouse earned
"S1" dollars in CA and "S2" dollars in MA and I earned "M"
dollars in MA how would we report these incomes to each
state?
You are a full year resident of MA. Your wife is a
part-year resident of CA, and a part-year resident of MA.

For MA purposes, you cannot file a joint return. You must
file married filing separately. You would file a full-year
resident return on Form 1, and your wife a part-year
resident return on Form 1 NR/PY. Your return would include
your M dollars of income. Her return would include her S2
dollars of MA income (and any other income she received
after she became a MA resident).

For CA, assuming you had no CA source income, you have the
choice of filing either married filing separately or
jointly. Either way, you would use Form 540NR. Because of
the graduated rates, all of your income from all sources is
used to compute the average rate that would have resulted if
your wife (if separate) or both of you (if joint) had been
California residents for the entire year. That rate then
applies to your wife's income from all sources received
during the part of the year when she was a California
resident, and any California source income she may have
received after she became a nonresident (a final paycheck,
for example, that might have been received after she moved
to Massachusetts). She will probably be better off to file
separately, but you should calculate it both ways.

If there is some double-taxed income, e.g. a final paycheck,
bonus, or other payment from your wife's CA employer
received while she was a MA resident, MA will allow her
credit for the CA tax on that income, limited to the
proportion of her MA tax liability that relates to that
income.

Katie in San Diego

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