When you sit down to do your tax return preparation, you may find out you need to file two state returns. While this can seem like a lot of work, breaking it down into simple information will make it easier to understand and complete. Here is a brief guide to what you should know about filing multiple state tax returns.

Why Would You Need to File in Two States?

Part of the tax return preparation should include collecting the information about your employment, income, and living situation—all of which can affect the state taxes that you owe. If you lived in one state and worked in another all year, you’ll need to file a return for both states but may not have to pay taxes to both, such as if they have a reciprocal agreement. Moving states during the year will require you to file two returns as well, and you’ll need to divide your income and taxes paid between the two according to how long you resided in each. Married couples who work in different states will also need to file multiple state returns, and they might end up owing taxes to each state.

How Do You File in Multiple States?

Once you know the situation requires multiple returns, you’ll need to figure out what type of return should be filed. A nonresident return is filed for any income that’s made in a state you didn’t live in during the year. A part-time resident return will be used for those who moved states during the year.

In essence, you should complete a return for each state you made income in or lived in at any point during the tax year. Some states don’t require income tax returns if you make below a certain amount or only lived there part time, and others will have reciprocal agreements, where you can pay the taxes you owe for living in one state to the state that you worked in. Always make sure you file a federal return, too. If you’re ever in doubt about your tax return preparation requirements, it’s encouraged to seek professional services from an experienced accountant to avoid hefty fines and penalties.

If you need to file in multiple states, Burch & Associates in Lincoln, NE, will ensure your tax return preparation is completed without a hitch. Their tax services are comprehensive and include business or individual returns and IRS audit representation. Their seasoned professionals will perform reliable tax services year-round, helping make your annual filing or estimated quarterly payments go more smoothly. Learn more about their tax options online, and call (402) 483-4791 to schedule an appointment.