Tax day can strike fear in the heart of even the most financially competent individuals. Filing taxes when you live and work in one state is complicated enough. But filing taxes in two states can get super tricky. What are the reasons you may need to file in two states, and how can you make this process less cumbersome?
In general, you may need to file in two states if you moved from one state to another during the course of the tax year, or if you “live in one state but work in another,” according to attorney and financial planner Dan Caplinger in Daily Finance. But investments in other states or even gambling winnings may also come into play. Yes, it looks like what happens in Vegas can follow you home and show up on your tax returns.
In general, when you’re dealing with multiple states it may be a good idea to bring in a tax professional to make sure you cross your Ts and dot your Is. Here is a rundown of the times you may need to file in two separate states, as well as some tips to make the whole process less of a headache. Take heart: at least you only have to go through this ordeal once a year.