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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15179
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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My wife works full time in Texas and we have an apartment there.

Resolved Question:

My wife works full time in Texas and we have an apartment there. I work full time in California and we own a home in California. We have one dependent still in College in California. Texas has no state income tax. How should I file our federal and California returns?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

For federal purposes, you will file a joint return. And in California you would file a joint return as well, but the income earned by your wife in Texas would not be taxable, unless your wife is considered a resident of California.

Megan C :

If she lives in Texas, and works in Texas then there is no California tax on that income. However, if she's considered a California resident she will owe tax on that income even though it was earned in Texas.

Megan C :

Is your wife a Texas resident, or a California resident?

Customer:

What would determine that? I believe she is a Texas residant but what would California need to see?

Megan C :

If your wife is in California only for temporary or transitory purpose, she is not a resident of California

Megan C :

Determining status is outlined in a publication found, HERE

Megan C :

Your wife living in Texas, having a Texas driver's license, etc would prove Texas residency

Customer:

She has an apartment lease, utilities, auto lease and automobile insurance. She can get a drivers license if need be.

Megan C :

There is no "hard and fast" rule - but it is possible for spouses to be residents of separate states.

Customer:

By the way...your chats are repeating themselves over and over countless times. I have to keep scrolling down to find current answers.

Megan C :

I'm so sorry - we must be having technical difficulties. It's not doing that on my end.

Customer:

If your wife is in California only for temporary or transitory purpose, she is not a resident of California: she is only in California on occasional weekends.

Megan C :

That is correct - if she's only there on the weekends to visit you, then she's not a California resident

Customer:

Can you clear the old chats off?

Megan C :

I really can't - I wish I could. Experts have the same access to the chats as customers do. We're at the mercy of the website :-(

Megan C :

On page 4, there are several different factors to consider...and it's noted that it's not then number of factors, it's the strength

Megan C :

But, if your wife lives and works in Texas, has a Texas driver's license, is registered to vote in Texas, banks in Texas goes to the doctor in Texas, then she's a Texas resident

Megan C :

However, based on what you have told me altogether, your wife is most likely considered a California resident, unfortunately. She owns a home joint with you there, she goes there for visits, her child is in a CA college, she currently has a California driver's license

Megan C :

You will need to work with a local tax preparer to get your items in order so that in the future she can be considered a Texas resident, but for this year, she would be a California resident.

Megan C :

If you file a joint return, you will also file a joint return for state purposes as well.

Customer:

Are you still there?

Megan C :

Yes, I am

Megan C :

Did you see what I just typed to you?

Megan C :

Or, do I need to copy and paste it?

Customer:

Megan,

Megan C :

Are you still there with me?

Megan C :

Yes?

Customer:

Are you still there to help me...I don't know what to do as you arn't responding to me.

Megan C :

I am here...

Megan C :

I've been responding?

Expert:  Megan C replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Megan C replied 1 year ago.
Hello,

As you have said you cannot see what I have written to you, I am switching to a different version so that maybe you can see my responses. What I have said to you is the following:

However, based on what you have told me altogether, your wife is most likely considered a California resident, unfortunately. She owns a home joint with you there, she goes there for visits, her child is in a CA college, she currently has a California driver's license

I think your wife would be considered a California resident, based on owning a home there, having a child in college there, and visiting there on the weekends. Working in Texas alone is not enough to get away from California residency, and California is one of the worst states about calling people residents. You would have an uphill battle proving your wife's residency in Texas.

You will file a married filing joint return in California, because you filed a joint return for federal purposes. She will pay tax on the wages she earned in Texas in California.

Please let me know if you have further questions. Please keep responding below. It's not real time like chat, but I'm going to be on all day so I will get back with you in a matter of minutes.

If you have the information you need, please rate as "excellent" so that I may receive credit for assisting you today.
Customer: replied 1 year ago.

Did you see the info I just sent?

Expert:  Megan C replied 1 year ago.

Thanks for your follow up. Unfortunately, the information that I seen last from you was you saying that you could not see what I said...

If you don't mind, copy and paste and send it again. I truly apologize for these technical difficulties. The site must be having problems today.

 

Customer: replied 1 year ago.

No problem...here is what I said:


My wife truely does reside in Texas. I go there most of the time. She comes to California 4 to 5 times per year.


 


Here is what TurboTax recommended:


 


1) I would prepare one married-filing-jointly (MFJ) return with the IRS.


2) Then I would prepare a "mock" Married Filing Seperate (MFS) federal return and one state MFS return. This mock MFS return contains only my income and my half of the deductions from the real MFJ federal return. This ensures that TurboTax only transfers my income to the married Filing Seperate state return. I would file the MFS state return but NOT the mock federal return that it pulls the information from.


 


Your thoughts?

Expert:  Megan C replied 1 year ago.
Thanks for your follow up. The problem with your situation is that you both are residents of a community property state. Both of you have California sourced income because on your return you claim 1/2 of the income of the other spouse on your return.

Based on what you have said, though, I think you would have an uphill battle getting California to agree that your wife was not a resident, mainly since she owns property there and has a child in college there. You could fight it, but they are pretty ruthless about determining that people have residency in their state.

Please let me know if you have any further questions. If not, please rate as "excellent" so that I may receive credit for assisting you today.
Customer: replied 1 year ago.

4 quick questions:


1) My daughter works as well as going to school so what if we don't claim her as a dependent


2) What if we filed seperate federal tax returns


3) We are upside down on our property so we can show that we would not be able to sell it


4) How would the state of California even know if she doesn't file and the employer isn't withholding anything so nothing would go to the state from the employer

Expert:  Megan C replied 1 year ago.
Thank you for your follow up. Claiming or not claiming your daughter would not impact her residency. If you filed separate federal returns, you would have the same problem because you are both in community property states. You both would still have California sourced income. Whether or not you can sell the property also won't impact your residency, either - owning the property is enough. The state of California is very resourceful. I don't know how they figure things out, but one of my fellow experts here had a situation where there was a truck driver who started and completed his routes in California, and even though he was domiciled in Illinois California tried to claim him. IT took that expert considerable resources to fight that determination. The point is, California is very resourceful and ruthless about claiming residency of people. They need the revenue.

Please let me know if you need anything else additional. If not, please rate as "excellent" so that I may receive credit for assisting you today
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15179
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 10 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thank you for the positive rating and again I'm sorry for all the site problems. It was a pleasure working with you today and if you ever need a social security tax or finance question answer please come back and see me. I hope you enjoy the rest of your day.

Thanks again
Megan

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