Work in one state, live in another.. Tax question

Discussion in 'After Hours Lounge (Off Topic)' started by Marshall Alsup, Dec 11, 2003.

  1. Marshall Alsup

    Marshall Alsup Second Unit

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    Hi everyone,
    Since HTF-AH knows all I thought I'd ask you guys a tax question I've been wondering about.

    I live in Washington State but work in Idaho. Idaho has an income tax but Washington doesn't. The man has been taking out the states chunk from my check and I was wondering if you guys think I'll get any of that back.

    I dont think I'll be geting much if anything back from the fed because I dont think my job took enough out, but I have no idea how the state income tax thing works.

    Another question: I must admit I'm kind of worried because I dont think my job is taking enough out. This page shows that I'd owe $3910 (the single table) or $1000 (the head of household table) and I'm not sure which I fit under. The problem is that my job has only taken out $3500 (for the federal portion). I am just a single guy living in an apartment so I'm not sure which I am. I hope the "head of household" because otherwise I'll end up paying in I think!! Man, I'm going to be annoyed if they didn't hold out enough.

    What do you guys think? Am I screwed or will I see some money come return time?

    Thanks,
    Marshall
     
  2. Alex Spindler

    Alex Spindler Producer

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    We run into this all the time. Perhaps this example will help sort you out. I would assume it would work for you in your situation.

    *Edit : Err, specifically this part:
     
  3. Chris

    Chris Lead Actor

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    Yep, I ran into this for years; in most years, I actually ended up coming out ahead; one of the things that many people forget is to actually file taxes in both states. Many file only taxes within the state they reside, where they will pay.. however, you must also remember to file taxes within the state you work, where you will get a pretty good refund [​IMG] Almost every year I worked in KC, MO, it balanced out pretty close.
     
  4. Craig Robertson

    Craig Robertson Supporting Actor

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    it really depends how Idaho taxes out of state workers, and that is up to the Idaho state legislature. your best bet is to check with a real tax advisor, not just a member that plays on on the HTF.[​IMG]
     
  5. Joseph DeMartino

    Joseph DeMartino Lead Actor

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    Joseph DeMartino
    Since I'm in your situation as far as filing status, I can tell you that you are not a "head of household." That only applies if you have dependents. (You can look this kind of thing up on the IRS web site.) Pets don't count, trust me, I've checked on this. [​IMG] (Although my cats, named Calvin and Hobbes, do now get junk mail as "Calvin DeMartino" and "Hobbes DeMartino" thanks to some rebate offer I on the back of a innouculation reminder that I got from my vet - which I think means I should be able to take deductions for them.)

    Why isn't your job withholding enough from your account? The revision to the calculations done a few years ago was intended to make the withholding amount as accurate as possible to avoid both refunds and payments - which cost the IRS money to process. How many exemptions are you claiming? If more than one, check with your HR department and see what effect on your withholding reducing whatever that number is in increments of one.

    I know for sure that when I worked in Manhattan and lived outside of the city I was liable for every dime of NYC income tax. [​IMG] But the others are right - get some advice from a tax professional.

    Regards,

    Joe
     
  6. Mark Zimmer

    Mark Zimmer Producer

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    Head of household is typically for single parents. We single guys are stuck with the 'single' table. [​IMG] So you may well be short, unless you can come up with some deductions. No tax cut for you!

    FYI, the relevant Idaho Statute re nonresident taxation, courtesy of Westlaw:

    63-3026A Computing Idaho taxable income of part-year or nonresident individuals, trusts and estates.



    (1) For nonresident individuals, trusts, or estates the term "Idaho taxable income" includes only those components of Idaho taxable income as computed for a resident which are derived from or related to sources within Idaho. This is to be computed without the deductions for either the standard deduction or itemized deductions or personal exemptions except as provided in subsection (4) of this section.

    (2) For part-year resident individuals, trusts or estates the term "Idaho taxable income" includes the total of: (a) Idaho taxable income as computed for a resident for the portion of the tax period during which a taxpayer is domiciled in or is residing in Idaho, plus (b) those components of Idaho taxable income which are derived from or related to sources within Idaho for that portion of the tax period during which a taxpayer is not domiciled in and is not residing in Idaho. This is to be computed without the deductions for either the standard deduction or itemized deductions or personal exemptions except as provided in subsection (4) of this section.

    (3) For the purposes of subsections (1) and (2) of this section:


    (a) Income shall be considered derived from or relating to sources within Idaho when such income is attributable to or resulting from:



    (i) Any business, trade, profession or occupation conducted or carried on in this state, including the distributive share of partnership income and deductions, and the pro rata share of S corporation income and deductions;



    (ii) The ownership or disposition of any interest in real or tangible personal property located in this state;



    (iii) The ownership or disposition of any interest in intangible personal property only to the extent that such property is employed in a business, trade, profession or occupation conducted or carried on in this state. Provided however, that interest income from an installment sale of real or tangible personal property shall constitute income from sources within this state to the extent that the property sold was located within this state. Provided further, that interest income received by a partner or shareholder of a partnership or S corporation from such partnership or S corporation shall constitute income from sources within this state to the extent that the partnership or S corporation is transacting business within this state;



    (iv) A resident estate or trust;



    (v) A nonresident estate or trust to the extent the income and deductions of the nonresident estate or trust were derived from or related to sources within this state;



    (vi) The conduct of pari-mutuel wagering, charitable gaming or any other form of gambling taking place within this state, except as expressly limited in section 67-7439, Idaho Code.



    (b) Notwithstanding the provisions of subsection (3)(a) of this section, transactions and investments made, placed or directed by Idaho resident registered broker-dealers and investment advisers or institutions exempt from registration under the Idaho securities act in securities listed with or through the New York Stock Exchange, the American Stock Exchange or any other stock exchange registered with the United States securities and exchange commission and approved by the director of the department of finance which generate dividends, interest, capital gains or similar profits or returns for nonresidents not otherwise subject to Idaho income taxation shall not result in the intangible property being deemed to have a situs outside the domicile of the owner.



    (c) Compensation paid by the United States for active service in the armed forces of the United States, performed by an individual not domiciled in this state, shall not constitute income derived from or related to sources within this state.



    (d) The income of nonresident or part-year resident individuals, trusts or estates which is derived from or related to sources both within and without this state shall be attributable to this state in the manner prescribed in the rules of the state tax commission.


    (4) In computing the Idaho taxable income of a part-year or nonresident individual, trust or estate, the standard deduction or itemized deductions, as defined in section 63-3022(j), Idaho Code, if applicable, and the exemptions, as defined in section 151 of the Internal Revenue Code or any allowance in lieu of such deduction, shall be allowed in the proportion that paragraph (a) of this subsection bears to paragraph (b) of this subsection:


    (a) The Idaho taxable income of the taxpayer modified as follows:



    (i) No allowance shall be made for either the standard deduction or itemized deductions;



    (ii) No deduction shall be made for personal exemptions or any allowance in lieu of such deduction.



    (b) The Idaho taxable income as would be calculated for a resident of Idaho modified as follows:



    (i) No allowance shall be made for either a standard deduction or itemized deductions;



    (ii) No deduction shall be made for personal exemptions or any allowance in lieu of such deduction;



    (iii) Compensation for active military service in the armed forces shall not be deducted;



    (iv) Income earned within the original exterior boundaries of any federally created Indian reservation by an enrolled Indian in a federally recognized Indian tribe on a federally recognized Indian reservation shall be added if not otherwise included.


    (5) An adjustment may be made to eliminate distortions in the amount of net income attributable to a taxpayer's activities within the state of Idaho. Such deductions shall be limited to circumstances involving itemized deductions as referred to in subsection (4) of this section and which reflect:


    (a) A failure to reflect the net income or deduction after reimbursements have been received; or



    (b) A failure to reflect the net amount of mortgage interest income or expense from activities within Idaho.


    (6) For the purposes of subsections (1) and (2) of this section, deductions and adjustments allowed in computing the Idaho taxable income of nonresident and part-year resident individuals, trusts and estates shall be prescribed in the rules of the state tax commission. Such rules shall be based upon:


    (a) Whether or not the deduction or adjustment is related to the production of income reportable to Idaho;



    (b) Whether or not the deduction or adjustment is related to income received, expenses paid, or events of tax consequence which occurred during a portion of a taxable year that the taxpayer was domiciled in or residing in Idaho; or



    (c) Any other appropriate basis for making the adjustment. An "appropriate basis" is one which the state tax commission finds is needed to insure that the amount of Idaho taxable income is fairly and reasonably related to a taxpayer's activities in this state. [I.C., § 63-3026A, as added by 1995, ch. 111, § 26, p. 347; am. 1996, ch. 40, § 3, p. 103; am. 1998, ch. 42, § 4, p. 175; am. 2000, ch. 38, § 5, p. 70.]




    HISTORICAL NOTES

    Compiler's Notes. Sections 2 and 4 of S.L. 1996, ch. 40 are compiled as §§ 63- 3022J and 63-3029B, respectively.
    Section 3 of S.L. 1998, ch. 42 is compiled as § 63-3022M.
    Section 4 of S.L. 2000, ch. 38, is compiled as § 63-3022.
    Section 6 of S.L. 1998, ch. 42, declared an emergency and provided this act shall be in full force and effect on and after March 17, 1998, and retroactively to January 1, 1998. Approved March 17, 1998.
    Section 6 of S.L. 2000, ch. 38 declared an emergency retroactively to January 1, 2000 and approved March 22, 2000.

    I.C. § 63-3026A, ID ST § 63-3026A


    Current through the 2003 Session


    ============

    The short message is, not only will Idaho tax the crap out of you, it won't allow you a standard exemption or any deductions either. Time to look for work in Washington.

    Not intended to be legal advice, and strictly for entertainment purposes, you understand. Seriously, talk to a tax professional in Idaho.
     

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