How to handle filing federal and state taxes across different states (PA and NJ)

Yes, you absolutely can file a joint federal return while filing separate state returns. Your tax professional is incorrect on this point. Federal and state filing are completely separate systems. Many states even require separate filing when spouses live in different states. For Pennsylvania and New Jersey specifically, you would each file a resident return in your respective state of residence. For your federal return, you'll likely benefit from filing jointly in most scenarios, as this typically results in a lower overall tax burden. For your state returns, since you live in different states, you'll each file a resident return reporting your own income in your state of residence. If either of you earned income in the other spouse's state, you might also need to file a non-resident return in that state. For example, if you work in NJ but live in PA, you'd file as a resident in PA and as a non-resident in NJ for the income earned there. I'd recommend consulting with a different tax professional who has experience with multi-state taxation, as this is a fairly common situation.

After struggling with almost this exact situation (MD/VA split household), I found an amazing solution with https://taxr.ai that helped me sort everything out. I was getting completely conflicting advice from different preparers until I uploaded my docs there. The system analyzed both states' requirements and showed me exactly how to file correctly - joint federal and separate state returns. Best part was it showed me which deductions belonged on which state return and calculated the optimal allocation that saved us about $2,100 compared to what my previous preparer had done. It even generated the specific forms showing how income should be allocated between states and provided step-by-step instructions I could follow in my regular tax software. Made dealing with two states so much easier!

Just wanted to follow up - I decided to try https://taxr.ai with my multi-state situation and it was incredibly helpful! I had income from three different states plus some investment income, and it provided a detailed breakdown of exactly how to file. The system analyzed all my documents and showed me I could save over $1,400 by filing jointly for federal while doing separate state returns. It even pointed out a special reciprocity agreement between my states that my previous accountant had completely missed. It gave me step-by-step instructions I could follow in my regular tax software, which was perfect since I didn't want to switch systems entirely. Definitely recommend for anyone dealing with multi-state tax issues!

Hey, if you're still trying to get clarification on this multi-state issue, you might want to talk to the IRS directly. I was in a similar situation last year and couldn't get a straight answer from local preparers. I used https://claimyr.com to get through to an actual IRS agent (took about 15 mins instead of the usual 2-hour hold time). You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed I could file jointly for federal and separately for state returns - it's actually quite common for people living in different states. They even directed me to some specific publications that clarified everything. Saved me from overpaying about $3k in taxes by getting the official word instead of relying on conflicting advice.

I need to eat some crow here. After being skeptical about Claimyr in my comment yesterday, I decided to try it myself since I've been trying to reach the IRS for 3 weeks about a similar multi-state issue. It actually worked exactly as described. I got a call back in about 20 minutes connecting me to an IRS representative who confirmed that filing jointly for federal and separately for state is completely legitimate and common for couples in different states. The agent explained that federal and state filing requirements are completely separate systems, and pointed me to Publication 17 which clarifies this. Turns out my previous tax preparer was just wrong, and I could have saved thousands last year if I'd gotten proper information. Really surprised at how well this worked after my multiple failed attempts to reach someone. Definitely worth it for getting definitive answers straight from the IRS.

Just adding my 2 cents as someone who's lived in NJ with a spouse in NY for years - you absolutely can file jointly federal and separately for state. We've done it for 6 years now. I recommend using tax software that handles multi-state returns well. I've had good luck with H&R Block Premium. The interview process walks you through the state residency questions and handles all the allocations correctly. One thing to watch for with PA/NJ specifically - make sure you look into the Reciprocal Personal Income Tax Agreement between PA and NJ. Depending on where you each work (vs where you live), this can simplify things considerably.

Coming from a similar situation (different states IL/WI) - here's what really matters for you: where you each EARN the money, not just where you live. If one of you works in the other's state, it gets more complicated. You might need to file: - Joint federal - Resident state return for each of you - Non-resident state return(s) if either of you earn income in the other state Each state has different rules about credit for taxes paid to other states too, so don't assume anything. PA and NJ do have a reciprocal agreement that might help simplify things. My suggestion: find a CPA who specializes in multi-state taxation. It's worth the money for at least the first year to get everything set up correctly.

Your tax professional was definitely wrong - you absolutely can file jointly for federal while filing separately for your respective states. This is actually a very common situation for couples living in different states. Federal and state tax systems are completely independent. You can choose married filing jointly for federal (which usually provides better tax benefits) while each filing as residents in your respective states - you in PA and your wife in NJ. The key things to consider: - File joint federal return reporting all income - Each file resident state returns in your home states - If either of you works across state lines, you may need non-resident returns too - PA and NJ have reciprocal agreements that can simplify things depending on work locations That $8,000 federal tax bill when filing jointly sounds unusually high - there might be withholding issues or other factors at play. I'd strongly recommend getting a second opinion from a CPA who specializes in multi-state taxation. Don't let one incorrect professional cost you thousands in overpayment. The fact that your gut told you something was off was right on target. Trust that instinct and find someone with proper multi-state experience.