If I live in one state and work in another, which state do I owe state taxes to?

I live in a state where I have my home address. I work ina different state. I also do work from home. When I travel, I stay in a hotel. Will my state tax fall in the state I live in or the state I work in? Can travel/hotel expenses can be deducted in the year end filing?

Real Estate, Taxes, Income Tax
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5 days ago

This is an interesting question, and has a few separate parts.

In very general terms, your state income tax(es) depends on where you are when doing the work, so per your example you would likely owe tax in your "home" state for the portion of your income earned while working from home, and from the "different" state when you are working in the office.  There is additional complexity here because each state has its own particular approach to how the accounting works, and depending on the two states involved in your own case, there may be specific rules around reciprocal agreements, credits to your "home" state tax return for taxes paid in the other state, etc.

The question about the tax deduction for your travel expenses has its own complexity, and depends on the details of your situation.  This topic is addressed at length by the IRS here.  You will see there that you must determine whether your home or the office in the other state is your "main place of business".

Good luck, and as in most cases where complexity creeps into the situation, consider seeking out a qualified tax professional in your area to consult on details like this and in accurately completing your income tax returns.

3 days ago
4 days ago