[jsue]

Hi, I know its crunch time for tax filing so any advice I will greatly appreciate!

This is my first time filing and I am confused. I thought to file on my own because it would not be complicated. I am a NJ resident who worked a few months in NJ, half the year in NYC (full time) and a very short stint in VA.

I did not think that my wages would be substantial so when I filled out my W4 (probably a mistake in retrospect) for my full time job in NY, I exempted myself because I thought I would be receiving a refund. Thus, my NY wages were not taxed. My dilemma is that I cannot believe I would owe the final amount derived to federal and NY state AND a little bit to NJ. I already filled out the Schedule A for the NJ 1040 and do not understand why I should still owe them money, when I have or will pay to NY the taxes I owe. Don't I get a complete credit from NJ?

Can someone explain what I may be doing wrong? I have filed returns before when I was a college student applying for a refund and never found it to be so difficult. Would claiming medical expenses that exceed the percentage of my income help lower my tax expense? Lastly, is filling out Turbotax online safe or would I be better buying the software?

I will greatly appreciate any advice given as the tax money I "owe" can be better used towards paying for tuition since I just started school again. I cannot claim education credits for 2004. Thank you!

[AtlantaTaxExpert]

Jsue:

Normally, if you work in NY and live and work in NJ, your withheld NY taxes will cover your NY state income tax liability. Then, the credit that NJ gives you for NY state taxes withheld covers your NJ liability.

However, you only worked in NY for 6 months, so the NY tax liability probably does not exceed your NJ liability (NY tax rates are higher than NJ, but not that much higher). Also, if you paid any VA taxes, you should factor that liability on NJ Schedule A as well.

Since you did have any NY state income taxes withheld, it comes as no surprised that you are experiencing the tax equivalent of "sticker shock". :mad:

Most people do not understand exactly how much they are actually paying in taxes. You have just gotten a first-hand lesson. :)

The online TurboTax software is just fine. ALL tax software is reviewed and approved by the IRS and, in the case of the state tax software, the state tax authority before it is made available on the website.

[jsue]

Thank you Atlanta TaxExpert. Its definitely sticker shock.

Well I do have one more question, do you know what NYSDI stands for on the NY W2 forms?

I don't believe its disability as TurboTax doesn't list it as such.

[AtlantaTaxExpert]

NYSDI stands for "New York State Disability Income" (I think).