Should I claim dependents on my tax forms this year if I know I'll get all my money back anyways?

Question

I have a summer job in Mississippi (I'm from Indiana), and I have always gotten all of my tax money back after filing. My question is, if I know I'm going to get it all back anyway, is there anyway I can fill out my tax forms so that they just leave it to me now. If I file 9 dependents, will it make a difference since I'll make less than the exemption? Also, I filed in two states for the first time last year, and Indiana wanted to tax money I earned in Alabama. Since Alabama already taxed it, Indiana's taxes are essentially a double tax. I got all my money back from Alabama, but owed at home. So should I just pick the state where I earned the most money and just file there? Is that legal if I'm a permanent resident of Indiana. Or could I file indidvidually with each state, and not "tell them" about my the job in other states?

Answer 1

each job should only be taxing income for one state. if you worked in 2 different states - each w-2 should have wages from one state - you shouldn;t be getting double taxed

Answer 2

If you know you'll get all your federal withholding back, and did last year, file your federal W-4 as exempt and they won't take any out.

For the states, rules vary on how much you can make without having to file, and on which income you have to report to that state.  But if you are above that limit, you have to file in both states

Answer 3

As for federal, you can claim as many allowances as you want on your W-4. You might owe at the end of the year.

As for state taxes, most, if not all, states tax residents on world wide income. This means that residents of states pay taxes on all income earned no matter what state it is earned in.

If you work in another state (other than your state of residence) you owe tax to that state on the income you earned in that state. Most states allow a credit equal to the lesser of the tax charged by the non-resident state or the tax charged by the state of residence on the resident tax return, so you are really not taxed twice. You just may get a refund from one state and owe another. You have to file in all states that you work if you meet their filing requirements.

Some states have reciprical agreements with other states where residents of either state are not taxed on income earned by the other's residents.

Answer 4

If you owed no federal tax last year and you will not owe any tax this year, you can fill out your W-4 as "exempt" for federal tax purposes.  Or, put enough allowances on your W-4 to reduce your withholding to zero.

IN will know about your income in MS, and vice versa.  The federal government shares your tax return info with the states where you earned money.  So forget about not putting all your income information on your state returns.

You were not double-taxed last year.  Your AL income was taxed by IN, and AL gave you all your taxes back.  It will likely be the same this year with MS.  You will file a resident IN return and a nonresident MS return.