Just to add a data point - I've been in this exact situation (work in Nevada, live in Arizona) for 3 years. I use FreeTaxUSA and it handles it perfectly. You're right that Nevada has no state income tax so you only need to file an Arizona return, but you do need to report all your income to Arizona since you're a resident. One thing nobody mentioned yet - if you spend a lot on gas for that commute, keep track of those expenses! While you can't deduct commuting expenses generally, if your employer reimburses you for any business travel (separate from commuting), that could be tax-relevant.

Great thread! I'm actually a tax preparer and wanted to clarify a few things I'm seeing in the responses. You're absolutely correct that Nevada has no state income tax, so ignore any "withholding" you think you're seeing for Nevada state taxes - that's likely something else on your paystub. Since you're an Arizona resident, you'll file a full Arizona resident return reporting ALL your income, including what you earned in Nevada. Arizona taxes you on worldwide income as a resident. A few practical tips: 1) Consider asking your employer to withhold additional federal taxes that you can apply toward your Arizona state tax liability, 2) You might want to make estimated quarterly payments to Arizona to avoid underpayment penalties, and 3) Keep excellent records of your work location if you ever work from home in Arizona - those days create Arizona-sourced income. The standard tax software like TurboTax, H&R Block, or FreeTaxUSA can absolutely handle this situation. You don't need a professional unless you have other complicating factors. This is actually one of the simpler multi-state scenarios since Nevada has no income tax!

Pro tip: Regardless of which tax software you use, ALWAYS review the actual forms before submitting. Go to the Forms section in TurboTax and check: 1) Form 8889 - This is specifically for HSA reporting 2) Schedule 1 - Your HSA deduction should appear on line 25 3) Form 1040 - Verify your total income and adjustments match what you expect The interview and summary screens in tax software are helpful, but they sometimes have display glitches that can cause unnecessary stress. The actual tax forms are what matter to the IRS.

This is such a common issue that causes unnecessary panic every tax season! I had the exact same problem with TurboTax last year - the summary screen showed $0.00 for my HSA contributions even though I had contributed the full amount. What I learned after digging into it is that TurboTax's summary screens are notoriously unreliable for showing the actual tax impact of various deductions. The software often displays $0.00 when it's already accounted for the benefit elsewhere in your return, or when there are display bugs in the interface. The key is to ignore those summary screens entirely and focus on the actual tax forms. Go straight to Form 8889 in the Forms section - that's where your HSA contributions are officially reported to the IRS. Then check Schedule 1, line 25 to see if your HSA deduction is properly reflected there. If those numbers look right, you're good to go regardless of what the summary screen says. I've found that TurboTax's interview process works fine for gathering information, but their summary and "tax breaks" displays are often misleading or incomplete. Always verify the actual forms before filing!

Did you file any amended returns for previous years recently? Sometimes refunds can come from prior year adjustments while current year payments are still processing separately.

This exact thing happened to me last year! I was panicking because I owed about $2,800 and they hadn't withdrawn it yet, then suddenly got a refund check for $900. Turns out the IRS automated system caught that I had missed claiming some education credits that I was eligible for. The key thing is to wait for that CP12 notice (or similar) that explains what they adjusted. In my case, it took about 3 weeks after getting the check to receive the explanation letter. Once I got it, everything made perfect sense - they had recalculated my return with the proper credits, which reduced what I owed significantly. My scheduled payment was automatically canceled once they processed the adjustment, so I never had to worry about them taking the wrong amount from my account. The whole thing actually worked out in my favor once I understood what happened. Don't stress too much - the IRS computers are actually pretty good at catching these kinds of errors. Just hold onto the check until you get the official explanation, then you'll know exactly where you stand.

dont forget that 457b money is also taxable so youll have to pay income tax on it too, not just worry about social security. i took mine out last year and got hit with a bigger tax bill than i expected. if you can spread it out over more years thats usually better for tax purposes.

This is such a complex situation and I'm dealing with something similar. I'm 63 and considering taking SS early next year while also needing to start my 457b withdrawals. After reading all these responses, it sounds like I really need to map out the timing carefully. One thing I'm still confused about - if the 457b distributions push me over the earnings limit and my SS benefits get reduced, does that mean I permanently lose that money or do I get it back later? I think someone mentioned it gets recalculated at full retirement age, but I want to make sure I understand this correctly before making any decisions. Also, has anyone here worked with a tax professional who specializes in retirement planning? My regular accountant doesn't seem to know much about how 457b plans interact with Social Security, and I'm worried about making expensive mistakes.

Just wanted to add - make sure you're calculating the QBI correctly. It's 20% of your QUALIFIED business income, not just 20% of whatever is on your 1099. You need to subtract business expenses first, then calculate the 20%.

I've been getting this QBI deduction for years on my freelance income. Super simple. One thing to watch for though - if you start making more from freelancing, remember there are phaseout thresholds. Made that mistake one year and had an unpleasant surprise at tax time lol