Taxes for NJ dwellers working in NY.

March 25, 2009 7:13 PM

Online Tax help specifically for people who live in NJ and work in NY?

My wife and I both lived in Jersey and worked in NYC last year. I prepared and filed our taxes as a married couple, but going through all the steps was a bit of a pain.We also got some correction letter from the IRS.
I'd like to find an easier, less error-prone way for this year.
Tax preparers charge over $200 dollars for our combined income bracket. We can't afford to pay that because my wife was laid off at the end of last year. (by the way, are there any tax rebates for people who were laid off last year?)
The main difference between this year's filing is the added income, not too much, from my wife's books.
So, can TurboTax help for this situation? IIRC we need to file federal, NY and NJ, with some 'robbing Peter to pay Paul' deductions involved at state level. Are there any other e-file programs or websites that can actually handle this process for people working in one state and living in another in a more streamlined manner?
I don't mind paying under $50 just to make sure we're doing it right and fast.


Thanks mefites!

posted by spacefire to work & money (4 answers total)

I live in NJ, but have W-2's from both NJ and NY.

I'm not a tax accountant, but I think it's standard for you to only file in the state(s) in which you resided for that year. If you resided in both NY and NJ, you'd file in both. If you resided only in NJ, then you'd file only in NJ.

When I ran through TurboTax the first time, it came back with me owing NJ something like $3000, which is just ridiculous and clearly wrong. I realized this is because I was declaring on my NJ form the taxes collected for the work performed in NY. Once I put in only the NJ income on the NJ state form, the numbers at the end made a lot more sense, a $60 refund instead.

I do not actually know if I need to file a NY state return. I don't believe so, since I didn't live in that state at all, but I'm not an accountant either.
posted by mrbarrett.com at 8:22 PM on March 25, 2009

Live in NJ and work in NY is my situation and that of literally hundreds of thousands of taxpayers. With that kind of demand, it is the case (and not surprisingly so) that the two major tax prep software packages (TurboTax and TaxCut) each handle it fine. Total cost for software, second state add-on and three e-Filings is over $50 -- but under $100.

Speaking only from my many years of paying taxes as per above and not (yet) being audited, and not as anyone's lawyer or tax accountant, Mr. Barrett's approach doesn't sound right. Instead, it seem that rules require you to file in both states, and avoid double taxation not by omitting the New York income from the New Jersey return but by claiming a credit for the tax paid to New York against tax otherwise owed to New Jersey.
posted by MattD at 8:43 PM on March 25, 2009

What MattD said - I did the same for about 5 years but I used TaxAct, and it worked just as good as TurboTax and TaxCut, as far as I could tell. You have to get the federal version, which usually comes with one free state, then you buy the other free state. The software installs them both and then automatically recognizes that you're doing multiple states, and guides you on how to do the deduction in NJ for the taxes you already paid in NY.

I'm with MattD as well on the second part - I'm not lawyer or tax accountant but this is how all of my many Hoboken friends (many much longer term residents than myself) had been doing it and from everything I read I came to understand it as the basic policy.
posted by allkindsoftime at 3:26 AM on March 26, 2009

Guess I need to look this up, then, and file in NY state if that's the case. Sigh. Filing taxes should be easier than this.
posted by mrbarrett.com at 4:20 AM on March 26, 2009