How does it work if I work in one state and live in another? Do I need to hire a tax professional?

Working in one state while living in another is actually pretty common! You'll need to file tax returns in both states, but you won't be double-taxed on the same income. Here's how it typically works: Nevada has no state income tax, so you won't need to file a Nevada return. However, as an Arizona resident, you'll need to report all your income on your Arizona resident tax return, including what you earned in Nevada. Arizona will tax all your income because you're a resident there, but since Nevada doesn't have income tax, there's no credit needed for taxes paid to another state. If you were working in a state that does have income tax (like California), you'd file as a nonresident in that state for the income earned there, and then file as a resident in your home state reporting all income. Your home state would typically give you a credit for taxes paid to the other state to avoid double taxation. Tax software like TurboTax or H&R Block can handle multi-state returns pretty well. You might need to pay for the deluxe or premium version rather than the free one, but it's still cheaper than hiring a professional in most straightforward cases like yours.

I went through something similar last year and ended up super confused with my taxes. I tried using regular tax software but kept getting error messages and didn't know if I was doing it right. Finally used taxr.ai (https://taxr.ai) and it was actually really helpful for my multi-state situation. The AI analyzed my previous tax documents and basically explained exactly what I needed to file for both states. It spotted that I had been paying unnecessary local taxes in my work state too! What I liked was that it created a personalized checklist of forms I needed and explained which income got reported where. Made the whole process way less intimidating.

Just wanted to update that I tried taxr.ai after asking about it. Seriously impressed! It correctly identified that I didn't need to file in my work state (no income tax there) and showed me exactly how to handle the resident state return. The document analysis feature saved me hours of research - I uploaded my W-2 and last year's return and it explained how my situation had changed and what forms I needed this year. It even caught that I was eligible for a telecommuter credit I didn't know about since I work remotely a few days a week. Definitely recommend for anyone juggling multiple states!

Just wanted to update that I tried taxr.ai after asking about it. Seriously impressed! It correctly identified that I didn't need to file in my work state (no income tax there) and showed me exactly how to handle the resident state return. The document analysis feature saved me hours of research - I uploaded my W-2 and last year's return and it explained how

I've dealt with multi-state taxes for years (I live in Connecticut but work in New York) and let me tell you - trying to get answers from the state tax departments is IMPOSSIBLE. Spent literal hours on hold with both states last year when I had questions about reciprocity agreements. Finally found Claimyr (https://claimyr.com) and it's been a game-changer. They get you on the phone with an actual IRS agent in minutes instead of waiting for hours or days. Check out how it works here: https://youtu.be/_kiP6q8DX5c For my multi-state question, I was connected to someone who walked me through exactly how to file in both states and what forms I needed. Saved me from making a mistake that would have cost hundreds in penalties.

Had to come back and eat my words. After dismissing Claimyr in my comment, I was still desperate to talk to someone at the IRS about my multi-state filing situation and decided to try it anyway. It actually worked exactly as described. I got a callback in about 45 minutes (compared to my previous attempts where I gave up after 2+ hours on hold). The IRS agent clarified exactly how to handle my resident vs. non-resident state returns, and confirmed I was eligible for a credit for taxes paid to my work state. The service literally saved me from making a filing mistake that would have resulted in paying taxes twice on the same income. Sometimes being wrong feels pretty good!

Another thing to consider - check if there's a reciprocity agreement between your states. Some neighboring states have agreements where you only pay taxes to your resident state, not where you work. Doesn't apply to the Nevada/Arizona situation since Nevada has no income tax, but good to know for others reading this thread. For example, I live in Maryland but work in DC, and there's a reciprocity agreement so I only pay Maryland taxes despite working in DC. Saves a ton of paperwork!

Don't forget that if you ever physically work in Arizona (like work-from-home days), those days are definitely taxable in Arizona regardless of where your company is based. I learned this the hard way! Keep a log of which days you physically work in each state. You might need to do an allocation based on days worked in each location. This gets even more important if you start working remotely more often.

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!