Isn’t it amazing how much we learn during tax season? It seems to me that, no matter how long I pay taxes, I always discover a new way to give the government more of my money each time this season rolls around. This year has proven no different. We made the move from Buffalo, NY to the Seattle area mid-year, and we were thrilled to see that we no longer had state income tax withholdings, because Washington state has no income tax. Well, that bubble burst in the last 24 hours when I discovered that good ol’ New York state won some controversial court case that allows them to tax — get this — nonresident income if the source of the income is in NY state. So, in essence, I get to pay income tax to NY state for all the money I’ve earned in the last 6 months while living in a stat with no income tax, and to top it off, as I’m filling out the forms in TurboTax, I get the nice little note that in addition to the taxes I need to pay, I may be hit with an underpayment penalty, since we didn’t pay it all through the year — wow.
Needless to say, I’m not too excited about the scenario, but what is there to do? The most frustrating thing is that the flux between the refund it seemed we were due to the amount we now owe is nearly a $3,000 spread… not fun. Anyway, I suppose I will end my little rant now, but I cannot justify paying taxes to a state when I no longer live there. Perhaps I should just be thankful that we now live in a state with no income tax, or we may well have had to pay both states what they claim is their due.