Questions about DD's taxes and filing

[Deleted]

MD resident

income earned in MD and VA

W-2 #1 - MD income, fed tax withheld, no state tax withheld
W-2 #2 - VA income, fed tax withheld, VA state tax withheld
W-2 #3 - VA income, no fed tax withheld, no state tax withheld, no SS or FICA withheld.  income was only $400 or so.  is this correct?

other income - earned as an independent contractor.  $210 for the year - $105 in MD and $105 in VA.  we checked the box in turbotax that says other income but then it never offered a place to input the amount.  no 1099 received.  for this calendar year she will receive a 1099 as she'll be making significantly more.  did we miss something in turbotax?

so she just needs to file federal and VA state (non-resident), correct?  or does she also need to file MD if she owes nothing and has nothing to refund?

also, is there free filing available on the VA website or will we have to do a paper return (turbotax is $28 to file and her refund is only $30)?

thanks

[mwcpa]

part one.... 400 with no taxes withheld on a w-2... yes, it is possible...

part two.... the 210 belongs on "schedule C".... income from self employment...

part three.... where does she live, MD or VA....if a resident of MD, she may, just to keep things clear.....

part four.... www.tax.virginia.gov/site.cfm?alias=FreeFile

[Deleted]

Mar 12, 2014 4:32:01 GMT -5 mwcpa said:

part one.... 400 with no taxes withheld on a w-2... yes, it is possible...

part two.... the 210 belongs on "schedule C".... income from self employment...

part three.... where does she live, MD or VA....if a resident of MD, she may, just to keep things clear.....

part four.... www.tax.virginia.gov/site.cfm?alias=FreeFile

thanks. 

the no state tax withheld was just a comment....she was exempt so no federal or state taxes should have been withheld but obviously several of her jobs can't read W-4's.  so if she has to fill out schedule C does that mean she can't file a 1040EZ?

[taxref]

MD and VA have a reciprocal tax agreement.  As a resident of MD, all of her W-2 wages will be taxed in MD.  

She will still need to file a VA return, though, for 2 reasons.  Those reasons are: (1) she had VA withholdings, and (2) she had self-employment income in VA (the reciprocal tax agreement only applies to wages).  

Since she needs to file Schedule C, she must use federal Form 1040.

[Deleted]

Mar 13, 2014 8:54:13 GMT -5 taxref said:

MD and VA have a reciprocal tax agreement.  As a resident of MD, all of her W-2 wages will be taxed in MD.  

She will still need to file a VA return, though, for 2 reasons.  Those reasons are: (1) she had VA withholdings, and (2) she had self-employment income in VA (the reciprocal tax agreement only applies to wages).  

Since she needs to file Schedule C, she must use federal Form 1040.

ok, next question on the self-employment income - it's based on where the company is located, correct?  because last year she worked one of the jobs in MD and one in VA (so $105 in each state).  and yes, I know she needs to file VA state so she can get back her $30 that they took out in taxes.  her total income was just under $6100 for 2013. 

you would think a 20 year old college student would have an easy peasy time of filing taxes....

thanks

[rangerj]

We are free in the United States to be "complex", for now. For example, I have a client who has been a construction laborer for 35 years. He owns 5 rental properties including 1 commercial building and 4 residential properties. He has invested his profits over the years and has amassed a million dollar portfolio and is in a partnership that owns several strip malls. His return should be simple, that is wages from his construction work, unemployment compensation, and maybe some interest income. Instead of sitting in a bar drinking beer and smoking cigarettes he chose to invest his income and he is living the American dream. He has worked (underline WORKED)  his way into the 1% without any help from the government. If you met this man you would not think he had a pot to spit in.  "Easy peasy" and tax return are not compatible terms in todays society.

[taxref]

"ok, next question on the self-employment income - it's based on where the company is located, correct?"

No.  For the self-employment income, your child was a sole proprietor.  The income would be based on the physical location where she did the work.  

"you would think a 20 year old college student would have an easy peasy time of filing taxes...."

What makes a tax return complex is not how much one makes, but rather the source(s) of a taxpayer's income.  Despite the fact her earnings were not high, the fact she had self-employment income and worked in 2 states added a huge amount of complexity to her returns.  

If she had worked in her home state with one W-2, her return would be very easy.  That is true even if she earned the same amount of money.



 

[Deleted]

Mar 13, 2014 21:26:32 GMT -5 taxref said:

"ok, next question on the self-employment income - it's based on where the company is located, correct?"

No.  For the self-employment income, your child was a sole proprietor.  The income would be based on the physical location where she did the work.  

"you would think a 20 year old college student would have an easy peasy time of filing taxes...."

What makes a tax return complex is not how much one makes, but rather the source(s) of a taxpayer's income.  Despite the fact her earnings were not high, the fact she had self-employment income and worked in 2 states added a huge amount of complexity to her returns.  

If she had worked in her home state with one W-2, her return would be very easy.  That is true even if she earned the same amount of money.



 

so since it's based on the physical location where she did the work, some was in MD and some was in VA.  so that means for 2014 she's going to need to keep track of where each job was done.  This week she's working in DC so does that mean next year she'll need to file in DC?  or does she just file in her state of residence?

and yes, previously she just claimed exempt on her W-4 and didn't make enough to pay taxes so nothing had to be files....I miss those days

[rangerj]

State and local governments have jurisdiction to tax you if you are a resident, or when you enter their state or local borders and earn money. The taxpayer should keep track of where and when she worked and how much was earned at each location. Keep track of the expenses allocable to each job. A simple prorata allocation may not be the most correct, nor the most beneficial. Feel free to be complex.

[mwcpa]

"This week she's working in DC so does that mean next year she'll need to file in DC? or does she just file in her state of residence?"

DC does not tax "non residents" (Congress saw fit to make sure DC could not tax them), but they do tax "business" enterprises in DC.  A self employed person is conducting a business that may be subject to that tax.

[Deleted]

ok, I need to do more research as she is not self-employed and not conducting a business and I'm sure all these other college kids are not going to all these great lengths.  She is working for a marketing company that does promotions at football games, basketball games, car shows, etc.  she does not market herself on her own....she looks for events that the company has and applies to work at one of them.