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Some states have what they call a "convenience rule" too. New York, Nebraska, Connecticut, Delaware, and Pennsylvania have these rules where if your employer is based in their state, they may tax your income even if you're working remotely from another state. It's worth looking into if your employer is based in one of those states!
Wait so if my company is based in NY but I live and work 100% of the time in Texas, NY could still tax me? That doesn't seem right...
Yes, that's exactly what can happen with the "convenience of employer" rule. If your employer is based in NY and you're working remotely by your own choice (for your convenience) rather than because the employer requires it, NY may still consider that NY-source income. This exact issue has been litigated several times, and these states have generally been able to enforce their rules. During the pandemic, some states temporarily relaxed these rules, but many have gone back to enforcing them. There are some arguments that these rules are unconstitutional, but as of now, they're still being enforced in these states.
As someone who travels a lot for work, I've found using a time-tracking app on my phone is super helpful for documenting exactly which days I worked in which states. Makes it way easier come tax time to calculate the percentages. Also, most states have a minimum threshold before you need to file - either income amount or number of days worked there.
I use Toggl Track for this - it has GPS location tracking so it automatically logs where I was working each day. You can set up different projects for each state and it calculates the time breakdown automatically. RescueTime is another good option that runs in the background and tracks your work hours by location. Both are free for basic use and generate reports that are perfect for tax documentation.
Remember that there's also the Child Tax Credit to consider. For 2023, it's up to $2,000 per qualifying child under 17. With twins, that's potentially $4,000 in tax credits! This is separate from dependent exemptions (which don't exist anymore) and can significantly reduce tax liability. This credit begins to phase out when income exceeds $200,000 for single filers, which might affect your girlfriend at $230K. You might benefit more from claiming the children for this reason alone.
There's also the Child and Dependent Care Credit if they're paying for daycare or nanny services for the twins! That can be worth up to 35% of $3,000 in expenses for one child or $6,000 for two or more children, depending on income.
This is exactly the kind of situation where you need to run the numbers both ways! With your girlfriend at $230K, she's likely hitting some phase-out thresholds that could make it more beneficial for you to claim the twins. A few key things to consider: - Child Tax Credit phases out starting at $200K for single filers, so she might not get the full $4,000 credit for both twins - Your lower income might qualify for better credits and deductions - Since you mentioned rental property, claiming Head of Household could give you better tax brackets for all your income The tricky part is that if she's been claiming them on her W-4 all year, she's gotten bigger paychecks but will owe that back if she doesn't claim them on the return. You'll want to coordinate this so one of you doesn't get stuck with a surprise tax bill. I'd suggest using a tax calculator or software to model both scenarios - her claiming them vs you claiming them - and see which gives you the better combined outcome as a family unit. The difference could be substantial given your income levels and the various credits involved.
Im going againts the grain here but tried FreeTaxUSA Pro Support and wasn't impressed tbh. Asked about my specific situation (remote work for a company in another state) and got pretty generic answers. Felt like they were just reading from a script. Ended up going to a local accountant who specializes in multi-state returns. Cost more but worth it for the personalized help.
I used FreeTaxUSA Pro Support for my multi-state situation this past tax season and had a really positive experience! I live in Texas (no state income tax) but work remotely for a company based in California, so I had to deal with CA nonresident filing. The chat support was incredibly helpful - the tax pro walked me through exactly how to handle my situation step by step. They explained how CA taxes remote workers even if they don't live there, helped me understand which forms I needed (540NR), and made sure I was claiming the proper deductions. The whole chat session took about 25 minutes and I felt much more confident about my filing. For the cost difference compared to other services, I think FreeTaxUSA Pro Support hits the sweet spot - you get knowledgeable help without paying TurboTax prices. For straightforward multi-state situations like yours (living in one state, working in another), their support should definitely be able to help you get it right. Just make sure to have all your documents ready when you chat with them so you can ask specific questions about your exact situation.
The community consensus on late W-2s is pretty clear: always amend, but don't stress too much about it. Most people see their amendments processed within 4-5 months, and the IRS generally doesn't apply penalties when you voluntarily correct your return. Just make sure you're using the latest Form 1040-X (the form was updated in January 2024), and if you e-file the amendment, you can track its status through the Where's My Amended Return tool after about 3 weeks.
I went through this exact situation two years ago with a late W-2 from my graduate assistantship that showed up in May. Here's what I learned: definitely file the amendment, but check if there was any federal tax withheld on that W-2 first. In my case, the university had withheld $340 in federal taxes that I hadn't claimed on my original return, so even though I owed an additional $180 in taxes from the income, I actually got a net refund of $160 from the amendment. The whole process took about 18 weeks from filing to receiving my amended refund check. Also, make sure to keep detailed records of when you received the W-2 versus when you filed originally - this documentation helped when the IRS asked about the timeline during processing.
AstroAce
I was in the same boat last year with tons of mileage from gig work. FreeTaxUSA let me add all my mileage expenses on Schedule C for free. Just make sure you have your total miles driven for business, your total overall miles for the year, and the dates you started and stopped using your car for business. The standard mileage rate is usually the best option unless you have a really expensive car with high maintenance costs.
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Chloe Martin
ā¢FreeTaxUSA worked great for me too! $0 federal filing with Schedule C. They do charge like $15 for state filing though.
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Yara Campbell
Just wanted to add that TurboTax Free Edition also supports Schedule C for reporting your 1099-NEC mileage, though they do try to upsell you to their paid version pretty aggressively. I used it last year for my contractor work and it walked me through the mileage deduction step by step. One tip that saved me - when you're entering your vehicle information, make sure you select "started using for business" as the date you actually began doing contract work, not when you bought the car. This affects how much depreciation you can claim if you go the actual expense route instead of standard mileage. Also keep in mind that if you use your car for both personal and business, you can only deduct the business portion. So if you drove 15,000 business miles out of 25,000 total miles, you can only deduct 60% of your car expenses.
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