How do you pay your taxes when you live and work in two different states?

Answer by  tamarawilhite (17883)

File the income tax return for your state of residence, Mississippi, and claim credit for income tax paid in Tennessee.

Answer by  varex (330)

The differences in the tax systems is the first element you should investigate. Approach this challenge by reading each state's Department of Taxation website. Most likely, you're income in Tennesse is already being withheld. When you receive your W-2, ensure you pay the difference or collect overage. For Mississippi, ensure you pay local property taxes, not income.

Answer by  DD (30)

Fill out tax forms for both states. You should get a full refund for what your employer withheld from your paycheck in Tennessee. Then fill out a form for Mississippi. You will pay what you owe to the state that you live in. Get a check from one state and send a check to the other state.

Answer by  maber (1427)

You will file federal taxes as normal, but you will need to file a state income tax return for both Mississippi and Tennessee. An accountant can help you with this.