Tax software and moving across state lines, do they mix?

February 26, 2007 11:37 AM

Worked in two states in 2006 (move from VA to OR). Does tax preparation software handle this well?

In 2006 I worked in Virginia half the year while I was in school (~7k) then relocated to Oregon where I was employed (~48k) and was married in October where my fiance/wife worked in Oregon part time (~5k). I want to file as an Oregonian and know I need to do some sort of funky business with the state taxes I paid in Virginia.

Are tax preparation software packages 'smart' enough to handle multiple states? I realize I'll probably have to pay extra to get more than one state, but I'm mainly concerned about it doing the right thing and not causing myself great headaches. The alternative is taking my W2s to a tax place, which I have never did before.

Any recommendations on which software title to get if there is one that can do this handily?

posted by wolfkult to work & money (16 comments total)

I had no problem using TurboTax. I worked in OK and KS and I just had to pay to download the additional state that I needed.
posted by moosedogtoo at 11:50 AM on February 26, 2007

Turbo Tax Online does this as well.
posted by mkultra at 11:51 AM on February 26, 2007

Yeah, Turbotax.com will probably handle it better than a real accountant would. I spent one year half in California, half in Oregon, and my local accountant totally missed it.

I ended up dumping the real person and sticking with TurboTax, which saved me a bundle as well.
posted by mathowie at 11:52 AM on February 26, 2007

I don't have any software recommendations, but I went through this very thing last year - I moved from VA to NY partway through the year. VA has a part-year resident form for when you leave the state. It's kind of a pain in the ass, but I filled it out by hand: it was long but not difficult. I got a refund.

The form is 760PY (instructions here - these are PDFs) - the confusing part is that you fill out a table on the back of the form before you fill out the form itself.

As long as your VA earnings were standard fare (i.e., not self-employed, have a W-2, etc.) and you are comfortable running the numbers, it's not a difficult form.
posted by taliaferro at 11:55 AM on February 26, 2007

H&R Block's TaxCut software says "The following states do not support part-year/non-resident forms: WI, OR, KY, AL, LA, UT, OK, ME, AR, ID, VT, DC, MT, DE, ND, HI, TN, NH." Looks like it will handle OR and VA. But you'd need to buy an additional state program.
posted by Snerd at 11:57 AM on February 26, 2007

Be careful about the OR Department of Revenue attempting to attach your enitre year's earnings and saying you should pay tax on them because you spent part of the year in Oregon. The Oregon DOR is staffed by rabid, starved, feral dogs. (I'm a former Oregonian and former business owner, and the DOR is reason #2 that I won't ever, ever, ever move back to the state.)
posted by SpecialK at 12:01 PM on February 26, 2007

I just did TurboTax with a VA to PA move. It was more confusing than it needed to be, I think-many of the state items were imported correctly from the federal, but not always with an explanation of what that number was. But if you weren't doing anything too outlandish, you should be okay.
posted by Chrysostom at 12:46 PM on February 26, 2007

I am also looking at a similar situation (part year in MN, part year in NY, got married in 6/06). I am wondering how the filing jointly works with the filing in multiple states since my now husband is only a resident of one state. I've filed in multiple states before but never jointly. How does it all work?
posted by noether at 1:05 PM on February 26, 2007

Snerd posted: H&R Block's TaxCut software says "The following states do not support part-year/non-resident forms: ...OR..." Looks like it will handle OR and VA.

Am I reading this right?
posted by stance at 1:16 PM on February 26, 2007

noether, we had a similar situation last year and had to choose married filing separately (Connecticut) regardless of the fact that we were living together at the end of the year. The instruction booklet should point you in the right direction.
posted by Saucy Intruder at 1:44 PM on February 26, 2007

I have used Turbo tax in the past when I moved from NJ, to PA, to VA. All in one year...

It worked like a champ.
posted by photodegas at 1:45 PM on February 26, 2007

stance: Am I reading this right?

Thanks, stance, you're reading it better than I did! Sorry about the confusion. Oregon is on the list of problem states for TaxCut Online, which I pasted into my reply.

But the problem-state list for TaxCut Software (which I used in my first draft) is shorter: The following states do not support part-year/non-resident forms: AR, DC, DE, HI, LA, ND, OK, VT, WV.

As the product names suggest, the Online version does not require you to install software. If the state lists are accurate, it seems TaxCut Software will handle the VA to OR move, while TaxCut Online won't.
posted by Snerd at 1:48 PM on February 26, 2007

As someone who moved from VA to OR once upon a time (and from OR to WA two years ago, and from WA to OR last year): I have never found tax preparation software that is capable of handling Oregon's godforesaken partial year tax filing requirements. NEVER. However I didn't try TurboTax, just Tax Cut, this year, before I gave up and decided to do it by hand.
posted by croutonsupafreak at 1:48 PM on February 26, 2007

The key thing you need to get right is foreign tax credit -- it's what keeps you from getting double-taxed by two states in the same way as it keeps from getting double-taxed by two countries.

TaxCut now handles it flawlessly, at least in the very common situations of work in New York, live in New Jersey or live in Connecticut.

(Basically, you want to keep NJ/CT from chargin you state income tax on work income NY already taxed, and keep NY from taxing you on investment or spousal income which NJ/CT taxes you on.)

It's important for you to recognize that people who move face a "penalty" that might seem a bit unfair, but which isn't really, and which in any event you have to pay. While each state is only entitled to charge you on the income earned while a resident in that state (other than the income taxed by another state because you worked there) they will both tax you at a marginal rate based on your total year's income.
posted by MattD at 6:55 PM on February 26, 2007

Just dealt with this myself (MI to NC, and will do it again when filing '07 taxes as we're preparing for a move to MN). TurboTax online did everything just fine. The desktop version can also be used, which can be an advantage because it will let you see the forms.

I had a problem with calculating the NC taxes; after a while on the phone with TurboTax support they kindly offered me a free download of the desktop version to help me locate and correct the issue. I couldn't have been happier - because of my difficulty in using the online version, they basically allowed me to file my NC state taxes for free to make up for the problems. I don't know what the support is for TaxCut but the TurboTax people seemed quite helpful.
posted by caution live frogs at 9:16 PM on February 26, 2007

TaxCut now handles it flawlessly, at least in the very common situations of work in New York, live in New Jersey or live in Connecticut.

To reiterate, as someone who tried it this year: TaxCut can not handle Oregon's partial year form.
posted by croutonsupafreak at 10:27 PM on February 26, 2007