Married filing joint - State tax

[Henley1989 10]

NJ Income Tax - Filing Status

Your filing status and taxable income determine the amount of tax you will pay. In general, New Jersey follows the Federal guidelines for determining your filing status. If you file a Federal income tax return, in most cases you must use the same filing status on your New Jersey return, unless you are a partner in a civil union. If you are not required to file a Federal return, use the same filing status on your New Jersey return that you would have used if you had filed a Federal return.

Partners in a civil union recognized under New Jersey law must file their New Jersey income tax returns using the same filing statuses accorded spouses under New Jersey Gross Income Tax Law. Partners in a civil union may not use the filing status single even though they do so for Federal purposes.

I think this means i have to file MFJ as thats what my federal is going to be. Whats confusing me is do I owe state tax even I didnt work here at all during the tax year...

[rutabaga 209]

Yes, I know... just like for RDP as well, but for simplicity sake for the OP I didn't go into too much detail. I'm a registered tax preparer here in CA and I've done some extensive research but only as it applies to CA of course lol

Cool! A little off topic: maybe the biggest cultural shock to me when it comes to the US is how different state laws can be in the States (I'm not in the US ATM, but I've lived--and filed taxes in--three different states over the course of six years )

Edited March 27, 2016 by rutabaga

[Henley1989 10]

Cool! A little off topic: maybe the biggest cultural shock to me when it comes to the US is how different state laws can be in the States (I'm not in the US ATM, but I've lived--and filed taxes in--three different states over the course of six years )

ye haha its so different here. In the UK everything was just done for you.

I guess I need to find someone on here thats been in exactly the same situation in NJ.

[rutabaga 209]

Yeah, it's the same in Serbia

Btw, if you look at the GIT-4 tax topic bulletin they mention on the page from which you quoted that, you can read the following on page 2:

Remember, if you filed a Federal return, you must use the same filing status on both your Federal and New Jersey returns, unless you are a partner in a civil union. However, if during the entire taxable year one spouse/ civil union partner was a resident of New Jersey and the other a nonresident, the resident may file a separate New Jersey return, if required. The nonresident spouse/civil union partner may also have to file a nonresident return if income was received from a New Jersey source. Each filer computes income and exemptions as if Federal married, filing separate returns had been filed. The spouses/civil union partners have the option of filing a joint return, in which case their joint income would be taxed as if both were residents.

Edited March 27, 2016 by rutabaga

[MariaR323 199]

Cool! A little off topic: maybe the biggest cultural shock to me when it comes to the US is how different state laws can be in the States (I'm not in the US ATM, but I've lived--and filed taxes in--three different states over the course of six years )

Yeah, each state has their own laws. I mean it makes sense... but then again I've never lived outside the U.S. so I don't know if all other countries are the same in that they don't separate laws. From what I've been reading, especially the U.K. folks, it's a big shock

I know CA very well and a couple other states just because I've done tax returns for those states as well... but I don't know 'em all lol

[Henley1989 10]

Yeah, it's the same in Serbia

Btw, if you look at the GIT-4 tax topic bulletin they mention on the page from which you quoted that, you can read the following on page 2:

Thanks. Ye so I think it has to be MFJ as that was my federal. What I now need to find out is, Do I owe taxes? I excluded my UK income as Foreign income exclusion, but I *may* still need to pay tax on it. I dont know

[rutabaga 209]

Well, from the quoted part (esp. the part I bolded and underlined) it seems to me that, if you were not a resident of NJ in 2015 (or am I getting that wrong and you can also be considered a resident of NJ for 2015?), that you two can choose between MFJ or MFS for your wife.

Regardless though, I feel like you should be able to exclude at least some of the income you earned out of state even if you go the MFJ route, but I'm really not familiar enough with NJ tax code to know that for sure.

Edited March 27, 2016 by rutabaga

[MariaR323 199]

Thanks. Ye so I think it has to be MFJ as that was my federal. What I now need to find out is, Do I owe taxes? I excluded my UK income as Foreign income exclusion, but I *may* still need to pay tax on it. I dont know

The FEIE is a federal exclusion (rule) - it does not apply at the state level automatically. (Some states adopt federal rules, most don't.)

At the state level, you must verify the filing status you must use and go from there. So in your case, you may be choosing to file MFJ at the federal level to get the extra benefit (larger refund)... but then if you use MFJ at the state level, does that larger refund cover the tax at the state level?

This is where comparing filing statuses help because you must determine which one gives you the best outcome.

If NJ requires you file the same status and state taxes are more than what the federal benefit is, then try doing it as MFS.

Did you use the download version of TurboTax? It allows you to save your work I believe and do it all over again.

[Henley1989 10]

The FEIE is a federal exclusion (rule) - it does not apply at the state level automatically. (Some states adopt federal rules, most don't.)

At the state level, you must verify the filing status you must use and go from there. So in your case, you may be choosing to file MFJ at the federal level to get the extra benefit (larger refund)... but then if you use MFJ at the state level, does that larger refund cover the tax at the state level?

This is where comparing filing statuses help because you must determine which one gives you the best outcome.

If NJ requires you file the same status and state taxes are more than what the federal benefit is, then try doing it as MFS.

Did you use the download version of TurboTax? It allows you to save your work I believe and do it all over again.

Yes I was using MFJ at federal to get biggest refund. THe refund is substantial compared to what she got last year. I guess it could over the state tax is tells me I owe, but I dont see why I would need to pay tax on income that I didnt earn in the states. So confusing haha

[rutabaga 209]

The FEIE is a federal exclusion (rule) - it does not apply at the state level automatically. (Some states adopt federal rules, most don't.)

At the state level, you must verify the filing status you must use and go from there. So in your case, you may be choosing to file MFJ at the federal level to get the extra benefit (larger refund)... but then if you use MFJ at the state level, does that larger refund cover the tax at the state level?

This is where comparing filing statuses help because you must determine which one gives you the best outcome.

If NJ requires you file the same status and state taxes are more than what the federal benefit is, then try doing it as MFS.

Did you use the download version of TurboTax? It allows you to save your work I believe and do it all over again.

Yes, this in particular is something a lot of people neglect to consider when choosing a filing status.

P.S. And yes, the download version might be better for you for this year as it lets you work on and save multiple versions of your return (i.e., you can prepare multiple returns in different ways). If you end up getting it, check the prices at Amazon as well as Intuit since when I've bought mine this year it was about $20 or so less on Amazon.

Edited March 27, 2016 by rutabaga

[Henley1989 10]

Yes, this in particular is something a lot of people neglect to consider when choosing a filing status.

I have to research a bit more... I think I will stick with MFJ for Federal but I want to see if I can get the state tax down to 0. There must be a way to get my income off the State tax calculation

[MariaR323 199]

Yes I was using MFJ at federal to get biggest refund. THe refund is substantial compared to what she got last year. I guess it could over the state tax is tells me I owe, but I dont see why I would need to pay tax on income that I didnt earn in the states. So confusing haha

I bet it is substantial! I'm almost positive it well covers the state tax and still leaves room for money in your pocket.

Yes, this in particular is something a lot of people neglect to consider when choosing a filing status.

Unfortunately, yes, a lot of people think it's as straightforward as it "looks". I don't blame them, I myself thought the same way, that is of course until I studied to become a tax preparer.

So, to sum it up...

You need to look at your state’s regulations to see which provision or combination of provisions is allowed for your particular situation, and further which combination of remedies provide the best overall tax outcome when all the taxing jurisdictions/rules are considered.

[MariaR323 199]

I have to research a bit more... I think I will stick with MFJ for Federal but I want to see if I can get the state tax down to 0. There must be a way to get my income off the State tax calculation

Maybe instead of doing the foreign earned income exclusion you should look at the foreign tax credit. Check the rules with NJ and see if they allow that credit. If so, switch to that on your federal so that it will automatically flow to your state. It may lower your federal refund but it may also lower or zero out your state balance.

[Henley1989 10]

Maybe instead of doing the foreign earned income exclusion you should look at the foreign tax credit. Check the rules with NJ and see if they allow that credit. If so, switch to that on your federal so that it will automatically flow to your state. It may lower your federal refund but it may also lower or zero out your state balance.

Thanks! Lots of research to be done. Will go to the official NJ website

[Rich and Wen 101]

You need to look at the form, NJ-1040-NR for non resident. Here in Illinois, such a form is used to exclude income that is earned by a taxpayer while they were not a resident.

Go to the NJ Department of Revenue website, scroll down to "Forms" and it's right there. It appears to be similar to the Illinois form, as it has 2 columns - one for the gross income shown on the Federal return, and one for income earned in New Jersey.

Don't forget the instructions!

Edited March 28, 2016 by Rich and Wen