Live In Nc, Work In Va For Va Company, How Do I Handle State Taxes?

[toryn34]

s About Taxes)/Live in NC, work in VA for VA company, how do I handle state taxes? Advertisement Expert: John Stancil, CPA - 4/24/2007 I hate to ask this question again, because I have seen it asked a lot, but I want to make sure this is the same for Virginia as other states.  I know Virginia has some oddities because so many people work here but live elsewhere.

So the real whole question is a multi part:

First, I started out working in Virginia(for a Virginia company), but living in TX where there is no state tax.  My company in VA has been witholding VA state taxes since I started with them.  I am staying with a friend in VA, but they would fly me home every few weeks.  So technically, I am traveling if that matters at all.  Should I have paid state taxes for VA for the couple of months I was still living in TX?

Second, I am still "traveling" and working in VA, but now we live in NC where there are state taxes.  How will I file state taxes? For Virginia as a non-resident, and NC as a resident but notate somehow about paying taxes in VA?  I've never had to do state taxes, but I take it that is self explanatory during the tax form process.

Third question is that I am being paid per diem by my company, for being away from my wife during all of this.  This is paid to me untaxed.  How will I report that, will they give me some form in the mail at the end of the year for that?  I assume it taxes into account that the money I get for that, is to be spent on taxable goods, food, lodging, etc, so I imagine I won't be taxed for it or penalized on my federal return, is that correct?

[Iddawg]

Rob,

Thanks for your question.

You will owe taxes in VA on all earning in that state.  Since you are now a resident of NC, you will also report income earned while a resident of NC on your NC return.  However, NC will give you a credit for taxes paid to VA.

If you do not report the spending of the per diem amount to your company, it should be reported as taxable income and should be included on your W-2. You may deduct any allowable expenses as miscellaneous itemized deductions on Schedule A, subject to the 2% limitation.  

Hope this helps.

John Stancil, CPA