Ask Me Help Desk - Military married taxes

My husband and I are both in the military, and were married in 2006. I lived and worked in VA for the year but am a NV resident. He lived and worked in MO and HI, and is a KS resident. We bought a condo in HI where he is stationed in 2006 so now we own a home in a state that neither of us is a resident of. We both deployed in the summer/fall of 2006 and are still both deployed. Can we both still file state taxes for our respective states of residency or does one of us have to change residency to the other's state in order to file jointly? Can we file our federal return jointly even though we didn't live in the same state? Help, our situation is extremely confusing!

Quote:

Originally Posted by mkssalsa

My husband and I are both in the military, and were married in 2006. I lived and worked in VA for the year but am a NV resident. He lived and worked in MO and HI, and is a KS resident. We bought a condo in HI where he is stationed in 2006 so now we own a home in a state that neither of us is a resident of. We both deployed in the summer/fall of 2006 and are still both deployed. Can we both still file state taxes for our respective states of residency or does one of us have to change residency to the other's state in order to file jointly? Can we file our federal return jointly even though we didn't live in the same state? Help, our situation is extremely confusing!

I can send you the tax state guide but only through military email... [email protected]

Okay, I need some more information.

It is possible that, by buying the condoi in Hawaii, you both made yourselves Hawaii residents. In Georgia, there is a provision in the real estate laws that is called the Homestead Exemption. It can reduce your real estate taxes on your home by up to 50%. However, if you apply for the Homestead Exemption, by law you have declared that you are Georgia residents and are therefore subject to Georgia income taxes. It is a frequent mistake made by military personnel who are stationed in Georgia. Something similar MAY have happened in Hawaii.

If not, your husband probably needs to file a Kansas state tax return. I would have to check the Kansas tax laws to determine if he actually owes any taxes. His deployed status MAY make him exempt from the state taxes. Each state is different.

As for the federal return, yes, you CAN file jointly. Your physical location is irrelevant.

Now, are you subject to Hawaii state income taxes? Probably NOT (unless you inadvertently made yourselves Hawaii residents as noted above).

However, since you are both deployed, what are doing with the condo?

If you are renting it, then you WOULD have to file a Hawaii tax return to report the rental income. It's likely you would owe NO state income taxes, as the mortgage interest plus expenses plus depreciation would probably completely offset any profit from the rent, but that does not relieve you from the filing requirement. The rental portion would also be reported on your joint federal return and on your husband's Kansas return.

If you need professional help, I am available. I am a retired Army LTC, so I know how to handle military tax issues. If you are interested, you can contact me at [email protected].