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Reply with quote  #1 

Welcome to our new message board.  I'm looking forward to answering your challenging questions about taxes and basic financial planning.

Reply with quote  #2 
My husband recently won $25,000 on a game show that is taped in New York.  We received a 1099-MISC for this.  We live & work in Pennsylvania.  I understand that about 30% needs to be set aside for federal taxes.  In addition to PA taxes, do we also need to file a NY state tax form as well?  How does this work?

Thanks for any help with this. 

Reply with quote  #3 

I'm not sure of the New York rules, but I am sure of the rules for the following 2 states:


1.  If you hit a winning Massachusetts lottery ticket, you need to pay taxes to the Commonwealth of Mass, no matter where you live, and


2.  If you are on a game show in California, and win money, the State of California will tax you on your winnings.


Since every state, including New York, is aggressively trying to collect every dime of taxes they they possibly can, I would assume that New York would be looking for you to pay taxes to them on this income.  Have you gone to the New York Dept of Revenue's website to try to find this answer?


If you determine that you need to pay taxes to NY on this income, you must first report this income to NY on a non-resident tax return, IT-203.  You then take a credit for the taxes paid to NY on your PA return, to offset the taxes you will also report to PA on this income, since as a resident of PA, you're required to report all your income to them.   This is the only way to avoid paying taxes to more than one state on this income.


Congratulations on winning this money, and good luck navigating through the state tax rules.

Reply with quote  #4 
We are looking to do some home improvements in the near future, which will end up costing around $15,000 or so.  We have a HELOC with a rate of 9.0% from which we could draw the funds from, or alternatively we could just draw from our savings account.  Considering that the interest on the HELOC is tax deductible, would it be wiser (from a tax savings persepctive) to use the funds from the HELOC, or just from our savings? 

In a similar vein, would it be advisable to use funds from that same HELOC to pay down student loans in order to take advantage of the tax deductible interest on the HELOC?  Unfortunately, our AGI phases us out of the student loan interest deduction.


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