Indianapolis, IN asked in Tax Law for Indiana

Q: Moved to IN in June '18. Our state taxes are 2x what the calculator says they should be. Is this because we relocated?

We're using TurboTax. My wife had $800 withheld on $25000 income for six months. The calculator says she should owe $780, around what she withheld, but TurboTax says she owes another $1100! Does Indiana tax her income from the other state she lived in? Thanks in advance for the help!

ADDENDUM: IN's tax rate is 3.2%, so $780 makes sense for her six months in IN. I'm wondering if IN is taxing her for the whole year, even though she didn't live there until late June.

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1 Lawyer Answer

A: Not sure what kind of "calculator" you are using to figure income taxes due, but before running around in more circles try doing the simple math: If your wife earned $25,000 in 2018 and if her employer only withheld $800, that tax rate calculates out to 3.2%--which should raise your eyebrows.

Adding in the $1,100 figured by TurboTax and then doing the same simple math on the total amount ($1,900) results in a tax rate of 7.6%, which IMPO is much more reasonable--and less likely to trigger an audit.

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