2

Suppose that Sarah has a job which requires near constant travel on airplanes.

Also suppose that Sarah does not own a house, or rent an apartment.

Sarah lives out of hotels, motels, air-BnBs, etc... for at most a week at a time.

Almost all personal possessions Sarah own fit inside of a suitcase. Sarah owns a laptop computer, a cellphone, various clothing items, etc...

I realize that most people who travel for work do have something like an apartment where they live at least one month out of the year, but that's not what I'm talking about here. Sarah truly has no fixed-home. Suppose that Sarah travels year-round, and is never in the same city for more than one week.

How would Sarah pay taxes to the U.S. government? Specifically, state-level income tax? To which state would Sarah pay taxes?

  • 3
    State-level income tax isn't paid to the US government, it's paid to each individual state government. Most likely, Sarah would pay taxes to each state in which she was present doing work and would need to do a lot of record keeping about how much she earned in each state and how long she was present in each state. If some state had a claim on income not earned in the state, then there might be issues of getting a credit in one state for income earned in another state. – Justin Cave Aug 16 '20 at 1:17
  • Note that in some states you pay state tax when your employer is there, in some when you reside there, and in some when you work there. There is no synchronization, so worst case Sarah might pay triple state tax. Either way, she will probably spend all her vacation doing state taxes. – Aganju Aug 16 '20 at 1:27
  • 2
    In addition to what @Aganju said, some states that tax residents consider you to be a resident until you establish residency somewhere else, even if you no longer physically live there. If Sarah holds a driver's license from the last state she lived in, she could be on the hook for taxes there even if she never set foot there during the year. – Nobody Aug 16 '20 at 14:36
  • Paying each state is indeed a true life accounting hassle for professional athletes and touring musicians. – user662852 Aug 17 '20 at 2:02
5

I travel a lot for work. At least I did before this year. I can confirm that each state will tax you if you earn more than a certain amount, or work in their state more than some number of days. It varies by state as each has their own rules.

  • 1
    Correct. Although some states have no state tax, so pick those. – Aganju Aug 16 '20 at 1:26
  • @Aganju: But if you live in a state with no income tax, and work in a state that does, that state will collect nonresident income tax from you. (At least if the state is California.) – jamesqf Aug 16 '20 at 5:41

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.