Managing your Money Crash Course – Everything You Need to Know
If you are working remotely or from home, here are some key tax issues for all workers and employers. These state tax implications tips could save you several hundred, potentially several thousands of dollars in interest and penalties.
In this video, Dr. Nitin Chhoda explains the following:
1. The New Paradigm Shift Towards Permanent Remote Work
2. Overview of State Income Taxes
3. State Tax implications with Remote Work and Taxation
Next year’s taxes may be the least of your problems right now, and if after you watch this video, you say “Forget state income taxes for now, let’s put food on the table and keep the lights on. We’ll worry about taxes when things get better”, I completely understand and I would do the same.
However, many subscribers have asked Dr. Chhoda to cover this topic, and it’s important to not only think in the here and now, it’s also important to plan for the future.
Remote work is seen as more and more viable, since companies can cut costs while maintaining productivity.
Mark Zuckerberg, CEO of Facebook said that over the next 5-10 years, he expects as much as 50% of Facebook employees to work remotely.
If your living room, spare bedroom or kitchen is your office either temporarily or permanently, this has implications for your state taxes. Get an accountant – play it safe. Avoid interest and penalties
Dr. Nitin Chhoda explores potential state income tax obligations for remote workers from several states, including
California
New York
New Jersey
Pennsylvania
Texas
Florida
Georgia
Virginia
North Carolina
Michigan
Illinois
Ohio
Depending on where your remote office will be based, there could be additional tax burdens in store for you and your employer.
State of domicile = where you live / have your primary residence
State of work = where you work
Remote work raises the question of whether an individual or a business has established a tax presence in a different state.
If you establish a presence in a different state, it could come with additional tax reporting obligations. However, some states have reciprocity agreements with other nearby jurisdictions.
