due to my job in nyc, I have to maintain a residence nyc. i rent not own a house in nyc. my wife lives in a house with our kids in nj and also works there. how do we file for taxes.

AtlantaTaxExpert

OPTION #1:

You should file jointly on your federal return. You file jointly in both states.

You will report your wife's income for sure on the NJ return. You may want to report your income as well and claim the credit offered by NJ for the taxes paid to NY, filing as a part-year resident of both NY and NYC.

OPTION #2:

You should file jointly on your federal return. You file jointly in both states.

You report as a NYC full-time resident, reporting only your NY-based income. Your wife reports as a NJ resident, reporting only her NJ-based income.

In both Option #1 and #2, you both get to claim your children on ALL returns.

OPTION #3:

You both file Married Filing Separately. The person who gets the biggest tax advantage claims the children on his/her return.

Which option is best? Absolutely no idea!!

I would need to know a variety of information (age of children, income levels for you and your wife, whether the children attended daycare, and other items) before I could run scenarios using tax software to determine which option would produce the lowest tax. I do this every year for a NJ couple who have been my clients for six years. One year, filing jointly produces the lowest tax, while the following year, the file separately because they pay slightly more in federal tax, but save more on the state taxes.

I cannot do this type of scenario work for free. I would have to receive compensation similar to what I would charge to prepare your tax returns. If you are interested, contact me at . I can provide references from several of my NY- and NJ-based clients.