Another reason to use standard: audit
If you get selected for an audit of your itemized deduction or a specific category (e.g. all medical expenses or all charitable contributions) then at best you have the time to send in all the receipts, and then answer questions about some. At worst, the auditor disallows something and now your itemized is less than the ...
The very short version is "laws". The more helpful version is that every state has its own taxation requirements. For instance, if you work in Illinois you are required to file appropriate forms stating what you say your residence is.
Every state works a little differently, so you'll need to review every involved state. Here is a law firm's advice on ...
Whether or not you owe state income tax is determined by state residency rules. Say you work remotely for a company in Texas (no income tax state) but you spend all of your non-liesure time in NY, the office you keep is in NY, you receive your mail in NY, NY wants income tax from you because you are a resident. Now say the company you work for that's based ...
At the end of 2017, President Trump signed into law the Tax Cuts and
Jobs Act with among other things eliminated the federal tax deduction
for state taxes paid.
The state and local tax (SALT) deduction was not eliminated, it was capped ($10,000 for 2018). ~90% of the people that benefited from the deduction had income over $100k. So capping it limits ...
The state tax deduction lets you deduct state taxes paid from your taxable income for calculating the federal tax that’s due, not from the federal tax paid. Suppose you pay state taxes of $2,000 and your marginal federal tax rate is 30% — your deduction from the amount paid in federal taxes is $600, not $2,000. The justification is that money paid in state ...
As void_ptr clarified you won't be worse-off itemizing with deductions equivalent to standard deduction because the state refund is only taxable to the extent that the deduction benefited you.
Interestingly, it can actually make sense to itemize even with deductions lower than the standard deduction. For example, in Maryland you cannot itemize at the state ...
First let me say, I AM NOT AN ACCOUNTANT! And you should talk to one. They're really great, and they save you a ton of money.
For instance, I'm a mobile app developer based in NYC. I was in a similar situation: whenever I did freelance work, I got a 1099, on which I was taxed like crazy.
My accountant had me incorporate a DE as an S-Corp which I owned ...
File your 2014 tax returns by April 15, 2015 if you can.
DO NOT wait for your
2013 return to be processed and for your refund to arrive before starting work
on your 2014 tax returns.
Any refund from your 2013 Federal income tax return is not taxable income to you for 2014 (or for any later year either), neither for Federal income tax nor
for State or local ...
Why stop at Indiana? Why not say you live in a tax haven in a completely different country, and not pay any taxes at all, even though you still remain in the same place?
Oh, it's called tax evasion. Right. That thing they talk about on TV all the time these days.
Many people actually do it (though it's usually a little bit more complex, they set up ...
Since the current form of the question asks about moving to another state, yes, that's really probably your best option, provided that state is not something like California or Massachusetts.
States with No State Income Tax
There are several U.S. states that have no state individual income tax on salaries and wages. Currently, those are:
There are many famous people who enjoy New York City, but do not enjoy the taxes.
Many people commute to the city from Connecticut, New Jersey, or even further away. If you live in another state but commute to the city for work, you will still incur tax liability. If you move away and visit the city only for leisure or occasional work, you can reduce your ...
From the IRS website -
Austin - Internal Revenue Submission Processing Center
3651 S IH35
Austin, TX 78741
You are not the first person needing to ship to IRS via Fed-Ex or other private carrier.
For New Jersey, the shipping address is:
State of New Jersey
Division of Taxation
Revenue Processing Center
200 Woolverton Street
Trenton, NJ ...
You have many questions in this question; try to focus down to one question and it is more likely to be answered.
To address your question:
why would any state in their right mind not impose state taxes
Presumably you mean state income taxes. I live in Washington State, which has no state income tax. There are many ways to measure characteristics of ...
Obviously, I will take trips to New York here and there, but I don't
think that is relevant to the tax question.
Oh but it is! It may make you even a resident of NYS/NYC if you're not too careful.
In any case, you need to file a nonresident tax return in NYS because you have New York-sourced income. See more details on this page from the NYS treasury ...
They will not send a bill, though there's a chance they will eventually send an accusatory letter. You must proactively pay your taxes.
The simplest route is to send a check to each taxing authority with the respective full amounts due. I wouldn't bother calling them. You could also file amended returns with each containing the correct information. As a ...
The original idea was this: The federal government taxes your income, but if you send your income on to somewhere else that is in the public interest, you wouldn't need to be taxed on that money, as you were already giving it to somewhere that benefited society. This was the thinking not only of the State and Local Tax deduction, but also of the Charitable ...
You definitely need to find out what 'that person' ever did or didn't do. Nobody here can tell you that.
Maybe he never filed your taxes
Maybe he didn't file your taxes yet because he was too busy
Maybe he is a scammer and took your refund and left
Maybe he filed and mistyped your SSN / ITIN, or the amount.
Maybe he filed late and the processing hasn't yet ...
In states which have an income tax and require withholding (like Utah), the employer which issues the pay check is responsible for deducting the tax from your pay and sending it to the state. This is just like the procedure for U.S. federal taxes; the employer deducts the federal tax and sends it to the U.S. Treasury.
If you are employed in Utah, your ...
In most cases, if you live in State A and work in State B, you will pay income tax to State B, and State A will give you a credit for that in calculating how much
income tax you owe to State A. This might not be a dollar-for-dollar
credit, though. In some cases, where people cross over in both directions,
the two states might have arranged
a tax treaty ...
I don't believe you can avoid it altogether, but you could claim residency in a state that doesn't have state income tax, such as Florida or Texas (there are others). There are several resources online for full-time RVers that discuss this. According to those resources, you do have to declare a state as your state of residence, complete with driver's license ...
I was in a roughly similar situation: I moved from MA to WA part way through a year, paid by the same employer.
I filed a tax return with MA (which I had to do anyways) and got a refund.
Overall it works roughly the same as it would for federal taxes withheld but not owed: to get your money refunded, you have to file a return showing that you owed zero ...
Yes, as a Virginia resident you must pay income tax on income earned outside Virginia. If you pay income tax in another state, you can claim a credit in Virginia. However, because Florida has no state income tax you will not have to file in Florida and you will not claim the credit in Virginia. From the VA form 760 instructions:
As a Virginia resident, ...
What prevents people from doing this?
Laws (if you are lying about your residency)
It won't work for income taxes
Wouldn't you save a lot of money assuming the taxes are lower?
According to the Illinois Department of Revenue:
you must file Form IL-1040 and Schedule NR if
you earned enough taxable income from Illinois sources to ...
There is at least one state (Virginia) where one can only itemize the state tax if one itemizes federal taxes. So you might prefer to itemize the federal tax so as to be able to itemize the state tax if it makes no difference at the federal level. This of course assumes that you would get more at the state level by itemizing than taking the state standard ...
Maryland , Virginia, and Washington DC have a reciprocity agreement. You fill out all your taxes based on where you live not where you work.
I have worked for a company headquartered in Maryland, but in the DC office, while living in Virginia. The only tax form was for Virginia. The state W-4 was for Virginia.
If you had your employer send your state ...
The rule is simple: you deduct taxes in the year that you pay them.
For withholding of state income tax, if you get state tax taken out of your check in 2016, that counts as paying the tax. You can deduct that on your 2016 tax return.
If you pay estimated tax quarterly in 2016, those state tax payments would also be deductible on your 2016 tax return.
My first question is, why did the federal government ever do this? Isn't this just another way of transferring money to states?
There's also a purely mathematical reason for the federal govt to allow deduction of state and local taxes (ESPECIALLY SALT income taxes) from your federal tax income: in theory if tax rates were high enough, and no SALT deduction ...
All US states have their own policy on what they consider "residency" and what they consider a taxable resident.
So for example, California has income taxes while Nevada does not. Lets IMAGINE that Nevada says you can be a resident after a month, California has completely different requirements in determining whether it expects you to pay tax there, ...
For estimating your take home salary, I suggest using one of the many free salary calculators available over the Internet. I personally use PaycheckCity.com, but there are plenty of others available.
To calculate your allowances for the US Federal tax, you can use the worksheet attached to the form W-4.
Similar form (with a similar worksheet) is available ...