Tax Guru – Ker$tetter Letter

Q:

Subject:  NY & MN

HI THERE GURU MAN,

I DON’T WANT TO BOTHER YOU, BUT YOU MAY HAVE AN IDEA OF WHOM I CAN ASK
(I TRIED TAXCUT/H&R BLOCK WITH MY SOFTWARE, BUT THEY SAID MY KEYCODE IS INELIGIBLE)

I am doing taxes for a friend who is a full-time resident of Minnesota, but has a New York w-2.
She has $1498 of NY state taxes withheld.
I listed her as a non-resident of NY and full-time resident of Minnesota in the personal information in the software.
Now how do I go about preparing the state taxes? Do I need to buy and download New York software?
Then what will I do next (so that it does not just show that she owes $1184 to Minnesota?)

I DON’T KNOW WHO ELSE TO ASK???

HOW IS TAX SEASON GOING FOR YOU?

A:

Multi-state tax returns are very tricky and most professional level tax programs have a hard time doing it properly.  It wasn’t until just a few years ago that the Lacerte software, which I use, was improved enough to do the multi-state returns almost automatically.  Even so, I still often have to do some manual tweaking to get everything right.

The consumer DIY programs are not designed for anything that complicated and odds are that errors will slip through, resulting in a lot of hassles with both state tax agencies.

My point is that this is case for a professional tax preparer who is experienced with multi-state tax returns and not a task that you should be trying to handle on your own.

Good luck.

Kerry Kerstetter

Follow-up:

Aren’t you just the sweetest man alive!!!

Thank you for writing back to me.

When taxes are finished, we ride our bikes!

thanks again.