Posted: 11/20/2008 4:04:44 PM EST
Heya, I suck at my taxes haha. I got a letter from the Oklahoma tax commission that they re-figured my state taxes for 2007 and now I owe an additional 3k. Hrmph. I tried to call for two weeks, finally got thru today. The guy was very difficult to talk to, but he did help a little. I moved from OK to TX in 2007, worked half a year in each state. Apparently I didn't fill in something on my tax return, so they defaulted me and put in my full year's salary into state tax in ok. He says I can get it fixed by filing a protest letter, sending in both state's w2's for that year and they should be able to fix it. I have my w2 coming from OK, working on getting it from my current employer for TX. Any idea what I need to say in the dispute letter? Is there anything else I need to do other than send it and wait? I'm so paying somebody to do it for me this year, lol. Ugh, what a nightmare. Couldn't have come at a worse time either. Thanks in advance, I figure somebody here is a tax adviser of some sort.
Google Form 511NR. Hopefully your employer stopped withholding wages when you moved out of state. Amend accordingly but you might be required to show proof of new residence. It's really not that painful, just don't let these guys scare you.
I'd recommend posting in the OK section since TX doesn't have an individual income tax and most readers could care less.
If you moved from Oklahoma to Texas in 2007, you were a part-year resident of each state for the portion of the year you lived in each state. So, if you moved to Texas on, e.g., June 30, 2007, you would have been an OK resident from 1-1-07 thru 6-30-07 and a TX resident from 7-1-07 thru 12-31-07. Fortunately, TX does not have an individual income tax, so welcome home.
You have to pay tax to OK on your income earned while you were an OK resident. Again using my hypothetical 6-30-07 move date, your wages received thru 6-30 would be allocated to OK and be subject to OK tax, as would interest, dividends and so on received by you through 6-30. Income received by you after 6-30 would be allocable to TX and would not be subject to further state income tax.
What you need to do is complete the correct OK forms (OK Form 511NR) and correctly compute the tax you owe, or any refund due. Don't just send in a bunch of stuff and trust OK to compute the right amount for you. Get a good handle on this yourself before you send anything in.
Write up your protest and lay out the facts of when you moved from OK in a straightforward manner, and attach a copy of your W-2 forms. Also attach a copy of any correspondence you have received from OK thus far. Include you address, SSN, and daytime phone number.
Hopefully, your employer correctly reported the wages paid to you while you were an OK resident and withheld OK tax on your income accordingly, and stopped when you moved to TX. You should be able to compare your pay stubs to your OK W-2 to see if this is correct. I can't tell from your post, but did you change jobs and have different employers in OK and TX? If so, so much the better, as you should have a clean break with OK.
When you get everything together, make a copy of each piece of paper you are sending to OK, including a copy of the envelope, and send the package via certified mail, with return receipt requested. This way you can prove that you responded to their inquiries. You also will be able to refer to the documents you sent if they have any further questions.
If you are not comfortable doing the above on your own, I strongly urge you to seek the help of a competent tax professional, such as a CPA or a tax attorney. They will not work for free, but it might be cheaper for you in the long run to get the problem fixed correctly the first time.
Good luck mate.