Sprintax US Tax Preparation STEP 6 - Living in the US

Sprintax

12 Jan 202204:20

EducationalLearning

32 Likes 10 Comments

TLDRThe video script from Sprintex, hosted by Amy, explains the intricacies of determining state tax residency in the U.S., which can differ from federal tax status. After completing federal tax returns, users are guided through step 6 of Sprintex Tax to ascertain their state residency status. This involves detailing each state lived in and periods spent outside the U.S. during the tax year. The system auto-populates dates and requires users to select entry and exit dates for each state or country visit, categorizing them as temporary or permanent based on the duration and intent. A detailed example is provided using Maria, a student from Spain, to illustrate the process. The video emphasizes the importance of accuracy in listing visits to ensure correct state tax calculations and offers live chat support for any queries.

Takeaways

📊 Federal and state tax residence statuses can differ, and being a non-resident for federal taxes doesn’t automatically make you a non-resident for state taxes.
📝 Use Sprintax to determine your state residency status after completing your federal tax return.
📆 The U.S. tax year runs from January 1st to December 31st, and you only need to list visits for the relevant tax year.
🏡 List all your visits to different U.S. states or periods spent outside the U.S., including the first entry date set to January 1st.
🗓️ Select an exit date that corresponds to the day you left a state or entered the U.S. from abroad.
🏢 Specify the type of visit and accommodation for each period you lived in a state or outside the U.S.
🔍 Sprintax automatically pre-selects 'Outside the U.S.' in the state field for the first entry.
🔄 Continue listing every visit to different U.S. states and exits from the U.S. until the final exit date of the tax year.
📋 Review and adjust entry and exit dates on the residency status step if you cannot list all periods outside the U.S. correctly.
🛫 Understand the difference between temporary (fixed, limited period) and permanent (unlimited term) visits for tax purposes.
✅ If you have questions, Sprintax’s live chat team is available 24/7 for support.

Q & A

What is the main topic of the video?
-The video discusses the difference between federal and state tax residence status and how to determine state residency status using Sprintax.
Why might federal tax residence status differ from state tax residence status?
-Federal and state tax systems have different criteria for determining residency. Being a non-resident for federal taxes doesn't automatically make you a non-resident for state taxes.
When does the U.S. tax year start and end?
-The U.S. tax year starts on January 1st and ends on December 31st.
What is the purpose of listing all visits in and out of each state on Sprintax?
-Listing all visits helps Sprintax determine your state residency status based on the dates you spent in each state and outside the U.S.
Why is the first entry date in the residency status step automatically set to January 1st?
-The first entry date is set to January 1st because it marks the beginning of the tax year, and users only need to list their visits for the relevant tax year.
How should one select an exit date in the Sprintax questionnaire?
-The exit date should be the day before you entered the U.S. from outside the country or the day you left a particular U.S. state.
What are the two types of visits that Sprintax differentiates between?
-Sprintax differentiates between temporary visits, which are fixed and limited, and permanent visits, which are unlimited and sever all personal ties with the prior state or country of residence.
Why is it important to correctly list all periods outside the U.S. during the tax year?
-Correctly listing all periods outside the U.S. is crucial for accurate residency determination and to avoid errors in the tax return.
What should you do if you are unable to list all the periods outside the U.S. correctly?
-If you cannot list all periods correctly, you may need to review and change the entry and exit dates you entered on the residency status step earlier in the Sprintax questionnaire.
What happens if you do not list your visits correctly on the residency status step?
-If visits are not listed correctly on the residency status step, you will not be able to list them correctly on the residency determination step either.
How can users get support if they have questions while using Sprintax?
-Users can get support from Sprintax's live chat team, which is available online 24/7.
What is the name of the person presenting the video?
-The presenter's name is Amy, and she is from Sprintax.

Outlines

00:00

📊 Understanding Federal vs. State Tax Residence Status

The video introduces viewers to the concept that federal tax residence status can differ from state tax rates and status. Amy from Sprintex explains that being a non-resident for federal taxes does not automatically make one a non-resident for state taxes. Sprintex Tax can help determine state residency status. The process involves completing the federal tax return and reaching step 6 in Sprintex Tax, where details of each state lived in during the tax year and any periods spent outside the U.S. are required. The tax year in the U.S. runs from January 1st to December 31st, and the system will use these dates to establish state residency. The video also clarifies how to input entry and exit dates for each state or country visit, and the difference between temporary and permanent visits, emphasizing the importance of listing all periods outside the U.S. correctly to avoid needing to revise previous entries.

Mindmap

Keywords

💡Federal Tax

Federal tax refers to the taxes levied by the national government on income, profits, capital gains, and other forms of revenue. In the context of the video, it is important because it is the first type of tax that an individual must consider when filing their tax returns. The video emphasizes that one's federal tax status can differ from their state tax status, which is a crucial distinction for taxpayers to understand.

💡State Tax

State tax is a tax imposed by individual states within the United States on income, sales, property, and other financial transactions. The video script discusses the complexity of state tax rates and residency status, which can vary significantly from federal tax regulations. Understanding state tax requirements is vital for individuals living in or moving to different states.

💡Residence Status

Residence status in the context of taxation refers to an individual's legal connection to a particular geographic area for tax purposes. The video explains that determining one's residence status for state tax can be different from their federal tax status. This is significant because it affects which state's tax laws apply to the individual's income and how they file their taxes.

💡Sprintax

Sprintax is a tax software mentioned in the video that assists individuals in determining their state residency status for tax purposes. It is used as a tool to simplify the process of understanding and filing state taxes, especially for those who may be confused about their tax obligations due to varying residence statuses.

💡Tax Year

The tax year is the period for which financial statements are made, typically from January 1st to December 31st in the United States. The video script highlights the importance of listing visits to different states or outside of the US for the relevant tax year, which is essential for determining one's tax obligations.

💡Entry and Exit Dates

Entry and exit dates are the specific dates when an individual enters or leaves a particular state or the US for tax purposes. In the video, it is shown that these dates are crucial for Sprintax to determine state residency status. For example, if someone entered the US on January 31st, the exit date entered would be January 30th to reflect the correct period of stay.

💡Type of Visit

The type of visit refers to the classification of an individual's stay in a particular location, such as temporary or permanent. In the video, it is mentioned that understanding the nature of one's visit is important for tax purposes. A temporary visit is for a fixed and limited period, while a permanent visit implies a longer, potentially indefinite stay.

💡Temporary Visit

A temporary visit is a stay in a location for a predetermined and limited duration, with the intent to return to one's permanent home or location. The video uses the example of a student from Spain who temporarily visits the US for her studies and returns home during breaks, illustrating the concept of a temporary visit.

💡Permanent Visit

A permanent visit is characterized by an indefinite stay in a location, severing personal ties with the previous place of residence. The video explains that for a visit to be considered permanent, one must have completely relinquished all personal connections to their previous state or country of residence.

💡Live Chat Support

Live chat support refers to real-time assistance provided by a company's customer service team through an online chat interface. In the video, Sprintax offers live chat support to help individuals with any questions they may have about their tax residency status or the process of filing state taxes.

💡Tax Residency Determination

Tax residency determination is the process of establishing an individual's tax residence for tax purposes. The video script describes how Sprintax helps users complete this process by listing their visits to different states and periods spent outside the US, which is essential for accurately filing state taxes.

Highlights

Federal tax residence status can differ from state tax rates and status.

Sprintax can help determine your state residency status for tax purposes.

To determine state residency, provide details of each state lived in during the year and any time spent outside the US.

List all visits in and out of each state for the relevant tax year.

The tax year in the US runs from January 1st to December 31st.

The first entry date is automatically set to January 1st and cannot be changed.

Select an exit date that corresponds to the day before entering the US or leaving a state.

Choose the type of visit and accommodation for each period listed.

Sprintax automatically pre-selects 'outside the US' in the state field for the first entry.

Continue listing every visit to different US states and exits from the US until the final exit date of December 31st.

Maria, a student from Spain, provides a detailed example of how to complete the state residency table.

If you cannot list all periods outside the US correctly, you may need to review and change entry and exit dates.

A temporary visit is for a fixed, limited period with an intent to return to a permanent home.

A permanent visit has no time limit and requires severing all personal ties with the previous state or country of residence.

Sprintax's live chat team is available 24/7 for support.

Completing step 6 in Sprintax involves listing all visits and determining the type of visit.

Transcripts

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Takeaways

Q & A

What is the main topic of the video?

Why might federal tax residence status differ from state tax residence status?

When does the U.S. tax year start and end?

What is the purpose of listing all visits in and out of each state on Sprintax?

Why is the first entry date in the residency status step automatically set to January 1st?

How should one select an exit date in the Sprintax questionnaire?

What are the two types of visits that Sprintax differentiates between?

Why is it important to correctly list all periods outside the U.S. during the tax year?

What should you do if you are unable to list all the periods outside the U.S. correctly?

What happens if you do not list your visits correctly on the residency status step?

How can users get support if they have questions while using Sprintax?

What is the name of the person presenting the video?