Basics of Taxes, Part 5: Income From Other States, And Other Complications

Image courtesy of user "pinkzebra" on
Image courtesy of user “pinkzebra” on

This is an excerpt from a presentation I give to college students about the basics of income taxes.


If you worked in more than one state, you might have a filing obligation in the state where you’re a resident, and in the state you worked in.

The process for handling this situation is:

  1. Fill out your out-of-state tax return(s)
  2. Fill out your resident state tax return
    • You may be eligible for a tax credit for taxes paid to other states

If You Get a Form 1099-MISC

If you get a Form 1099-MISC, you’ll probably need to file a tax return, and you’ll probably be liable for a tax called self-employment tax. You can read more about self-employment tax in this blog post.

Should You Do Your Own Taxes?

People are surprised when I say people should do their own taxes. My reasoning for saying this is: if you’re capable of doing your own taxes, you’ll never see value in what a professional preparer is doing for you.

So I tell people, yes, you should do your own taxes, but only if:

  1. You feel comfortable doing them yourself
  2. You know what you’re doing, and
  3. You have time

In Part 2, I outlined some of the DIY options available to people for filing tax returns.

When to Ask for Help

  1. You feel like you’re in over your head or you don’t have time
  2. You’re self-employed in addition to being a student. Technically, if you get a 1099-MISC from an employer, you’re “self-employed.” This isn’t so complicated in and of itself. But if you have a real side business with income and expenses, it can get complicated.
  3. You have income from multiple states and aren’t comfortable with navigating the filings yourself.

Who to Ask for Help

You can find help from people with licenses, such as enrolled agents (like me) and CPAs.

No licensing is required for preparing tax returns (except in a few states), so you can find unlicensed preparers too.

The best way to choose is to ask around.

I do not recommend going to Google and searching for tax preparers and just going down the list calling or sending e-mails. Ask your friends, parents, professors, etc. for recommendations.