Two State Tax return using TurboTax - Double Taxed Income

Please don't guess and don't answer unless you know what to do.

I need help with my two state tax return. What is a double-taxed income and does it even apply to me?

Spouse earned in Kansas, all taxes on W-2 were withheld from KS.
We have a Kansas refund.
I earned in Missouri, and all state taxes were withheld from Missouri.
Both states didn't withhold from the same W-2, so I don't know if double-taxed applies.

In turbotax it keeps putting in my spouse's income and asking what portion is from his working in Missouri or a resident of Missouri. Turbotax says, "Don't worry, we make it simple" but me and several facebook friends disagree totally!

Do I say 0 on all Missouri income so that Kansas is my main taxer?

I have read this page, and it says if I worked at home to enter 0 for the Missouri. But I didn't work at home last year, this year I will.
http://turbotax.intuit.com/support/kb/state-taxes/multi-state/1945.html#3

So I don't know if Missouri wants their cut or not. I dont' get why my employer even put MO, since he is in KS. Ugh.

I just need some direction. Thanks.
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Starr DuskkASP.NET VB.NET DeveloperAsked:
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Tiras25Commented:
This cannot be done correctly unless you are using the CD or CD Download version of the software.

Unless you really understand what you are doing the online version must be manually done for both states individually.

The CD version will intergate the state versions to make the proper adjustments.

Try Live Commumity, call LTA or hire a Pro
Starr DuskkASP.NET VB.NET DeveloperAuthor Commented:
I am using the CD/download version.
And you didn't answer my questions are still unanswered.
I would think Turbo tax would tell ME what to do rather than asking me a dozen questions and not even having a HELP option on any of the pages or questions.

 
 
Tiras25Commented:
Your state of residence is relevant.

States assess income taxes on all income earned by their residents, as a general rule, even on income earned in a non-resident state. The employer, though, has a responsibility to withhold income only in the state where it was earned.

Unless MO and KS offer reciprocity, you better hope that your resident state offers a tax credit for income taxes paid to non-resident states.
Starr DuskkASP.NET VB.NET DeveloperAuthor Commented:
There is no reciprocity.
Since I live in Kansas, is Missouri entitlted to the taxes? Or is Kansas?
Because elsewhere it says if I work at home, I can put 0 down as my income on the Missouri form (non-resident) and they will reimburse my taxes 100%. Then Kansas can simply tax me accordingly. But that paragraph is in reference to me working at home in Kansas and not onsite in Missouri.
Also, once I fill out the Kansas form, it asks me if I have double-taxed income. I don't know if that applies or not to the Missouri income. Because I know Missouri taxed me, but Kansas hasn't really taxed me yet, have they? So if the above paragraph of putting 0 doesn't apply to my situation, should I fill out the double-taxed income portion and say yes, Missouri taxed me and Kansas is taxing me?
Thanks!
 
Starr DuskkASP.NET VB.NET DeveloperAuthor Commented:
I believe I have this figured out. The help files say to enter the values that require tax in Missouri, so I leave my spouses 0 for missouri, and only put a $$ amount for the MO W-2 amount.
Then on the double-taxed portion, I leave it blank.
In a nutshell:
I figured out the two state taxes!

I calculated the amount owed if the MO W-2 was really from KS and so I had a base starting point. As long as I could still end up with that amount with two state returns, I knew I would have it right.

In my non-resident state, it asks Enter wages and commissions taxed in Kansas. If you read the HELP it says enter the amount taxed in KS and ALSO subject to MO income tax. So I put both amounts as 0. Because mine was not taxed in kansas and my spouses' was not subject to MO taxes.

then it asks for other income taxed in Kansas. I left this blank.

federal adjustments left blank.
 
 then it asks income tax paid to kansas, I leave it blank, because I had already put dollar amounts as 0. Then my credit amount is 0 credit for both me and spouse.

Then I say done, and I get a $1839 MO refund.
 
then I go back to my Kansas tax form.
It had asked if there were taxes paid to other states, I said yes, and entered Missouri.

I have already completed my Missouri form, so it filled in the blanks with what it needed.

It asked Double-taxed income for missouri. I left it alone and it defaulted to the values from my Missouri form. The MO form had retrieved it's dollar amounts from my MO W-2. And I had left all my spouses' and KS stuff blank as you recall.

Then it says my out of state tax credit is $3104 and my KS tax refund is $2362.
 I then add the $1839 and the $2362 for my KS refund and it equals $4255, which is the amount of tax it calculated when I fudged the W-2 to say it was from KS and said that I had only KS taxes and no out of state.

I didn't delete the MO tax form, when I fudged the values, instead I just deleted the reference to the MO form on the page where it has summary of taxes paid to another state.

After I changed back the W-2 and added MO and did the aforementioned settings and voila, it all equals out and i get the same $$ amount.
 

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