Tax Help Question (2014, apartment, lease)

[kiplingif]

I moved to the commonwealth in late 2013. I foolishly did not change my W2 for work from my old state to here until mid-summer 2014. When doing my taxes online, I noticed this is a potential problem since my prior state withheld taxes for approximately half the year. When does being a Virginia resident actually begin?

1. If I go based off of my moving date (end of 2013) and show I was a VA resident for all of 2014, then Virginia wants back taxes since it is missing my income tax that went to the prior state. Is there a way I can file to get the money that was paid to the prior state back if I file as living in Virginia the whole year? All I have showing I moved out of the prior state would be my lease in my apartment.

2. If I go based off of when I changed my car registration, license, and W-2, it is mid-summer or so. Well, the first two things were done in late May and the W-2 in late July. If I switch the move date to July, it changes the formula to show that Virginia owes me money. What I have backing up these dates is my car registration forms, license swap, W2 change, etc.....

It seems like maybe the wiser and more proper choice is to pay the few hundred I owe to VA and try to figure out how to get the money I paid to the prior state back since it'd make up for the difference.

It seems the easier and more foolhardy choice would be to file my taxes as showing me becoming a resident of Virginia based on when my W2 says I did, pocketing the fat return, and hoping I don't get audited. I have no idea how common a state audit is.

Basically, did I become a Virginia resident X number of days after I was living here, regardless of when I changed things around with work and my car and such, or did I become a Virginia resident when my W2 says I did?

Any guidance on the matter would be appreciated. I don't really want to pay for an accountant since I am just taking the standard deduction and have nothing interesting going on financially other than this "when did I become a resident" issue. I guess I just got caught up in the move, new job, and thinking back to my military time when I kept my home state of residency regardless of living away from it (my new gig is with the federal government, but not the military). That isn't an excuse, though. I just want to fix this. And if there is a way to do it without losing out on the money paid to the prior state as well as paying Virginia the money it wants, I'd appreciate it.

[airjay75]

It sounds to me like you were basically a full year Virginia resident for all of 2014. I think what you would want to do is file a nonresident tax return in the state for which taxes were withheld but for which you were not actually subject to taxation. If you are comfortable using Turbo Tax or H&R Block's software, I think they should be able to do a nonresident tax return for you for the prior state - it will just cost you the $30 or $40 for an extra state software that they charge. I think you will fill out the return basically saying you had zero income subject to that state's income tax, you paid whatever your W-2 says, and, thus, you are entitled to a refund of the amounts you paid. That said, I haven't personally done that for any state so it is possible that it may not be quite that simple. I think that is what I would try as an initial matter.

If you choose to treat mid-year 2014 as when you actually changed your residence, I don't think it is really that big of a deal either, but, even there, you are going to have to file a part year resident tax return in both Virginia and your prior state. Assuming you're using tax software, you'll still be out the cost of the additional state tax return software.

Hope that's somewhat helpful.

[boyd888]

The simplest thing to do is to treat your taxes as if you were a resident of VA for all of 2014 (which you were) and your state income tax was withheld by the wrong state for part of the year, which is what it sounds like you want to do anyway.

You need to file a nonresident income tax return for whatever state you came from. Since you had no income in that state you will get a refund of all the money you paid to that state.

File a regular tax return for Federal and VA. I assume you will owe some money to VA since you only had it withheld for part of the year. Whether the refund from your old state will cover all what you owe in extra taxes to VA will depend on the rate difference between the two states.

[kiplingif]

Thanks to both of you! That was a much easier fix than I anticipated. Paying for both state returns is lame, but not a big deal in the whole scheme of things. The other state will be refunding enough that it still more than covers my remaining Virginia tax liability. Hooray.