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In the US we generally tax based on where you live, not where you temporarily reside. Federally if you're a US citizen you're welcome to live anywhere you'd lik

In the US we generally tax based on where you live, not where you temporarily reside. Federally if you're a US citizen you're welcome to live anywhere you'd like but the IRS will still require their payment. States are usually based around where you are more than half the year. But that's likely simple to show. If you're actually not there they don't have much of a complaint.

Pasorrijer 4y ago
Nope. This gets really messy for consulting companies, where employees "work" at the client location 3-4 days a week, 2-3 weeks a month. We had to track and report what states we worked in and what days, down to the billing hours, and then in some cases had to file tax returns in some of those states. Also, all of the partners were required to file taxes in every state where the company earned income, which worked out to something like 46 states and 5 countries.
- bombcar 4y ago
  Read up on the accounting required for baseball players. It's absolutely insane and sometimes comes down to "were they on the roster" or "in the stadium" or "on the lineup" and so forth.
abduhl 4y ago
Income is taxed where it’s generated in America, not based on residency (at the state level, the feds always get their pound of flesh). Many people don’t follow this rule but it’s smoothed over by reciprocal tax agreements between states. Companies are usually good about tracking this stuff and paying taxes appropriately, employees are usually not but the company pays the taxes correctly and so the employee lucks into doing their taxes correctly. Consultants will often find themselves confused after receiving a mean letter the first time they fuck this up because most people think as you do.
- jimmaswell 4y ago
  Each state has different rules. For one example Illinois doesn't tax remote workers of companies in Illinois who don't live in Illinois.
  - bombcar 4y ago
    Does any state do that? I'd think it could cause a civil war damn fast. The nexus is "where the work is performed" or "where the employee resides" and usually states have agreements with the neighboring states so it balances out.
    - superdude12 4y ago
      New York State does this. No civil war so far.
    - lesuorac 4y ago
      Did you miss the part of covid where a bunch of multi-state commuters stopped commuting? https://www.njspotlightnews.org/2022/09/nj-remote-workers-ny-companies-income-tax-murphy-proposal-property-tax-u-s-supreme-court-legislation-legal-battle/ https://www.njspotlightnews.org/2022/09/nj-remote-workers-ny...
- mr337 4y ago
  Yeah, this whole bit is really confusing. Some states have tax agreements as well. I think Illinois and Arkansas has an agreement. Also eyeballing CA as they send us one of those mean letters you speak of. That was "fun" to sort out.
- jeroenhd 4y ago
  Income is also taxed if it's generated outside America as long as you're an American citizen. Some people who emigrated to Europe as a child got quite a nasty tax bill for decades of untaxed income when the USA found out that they're still American citizens, for example. Many countries have tax law to deal with this type of American bullshit but it's still something to be aware of.
dfxm12 4y ago
States are usually based around where you are more than half the year. Just live in 3 different states for ~33% of the year each and you don't have to pay state taxes? Must be easy in NY/NJ/CT. :)
- tenarshins 4y ago
  Just live in a state with no income tax.
gamblor956 4y ago
In the US we generally tax based on where you live, not where you temporarily reside. Nope, sorry, completely wrong. You pay taxes to the states proportionately to how much time you spent in the state for the year. Many states don't even have a "floor" for how much time an employee works in a state before they're required to pay income and payroll taxes to that state, so in some states even one day working in that state triggers tax. Consulting firms track employees time spent in each state down to the hour so they can properly pay payroll taxes. Many consulting firms will even pay for tax return prep for employees required to work in other states long enough to trigger tax compliance.

Pasorrijer 4y ago

Nope. This gets really messy for consulting companies, where employees "work" at the client location 3-4 days a week, 2-3 weeks a month. We had to track and report what states we worked in and what days, down to the billing hours, and then in some cases had to file tax returns in some of those states. Also, all of the partners were required to file taxes in every state where the company earned income, which worked out to something like 46 states and 5 countries.

bombcar 4y ago
Read up on the accounting required for baseball players. It's absolutely insane and sometimes comes down to "were they on the roster" or "in the stadium" or "on the lineup" and so forth.

abduhl 4y ago

Income is taxed where it’s generated in America, not based on residency (at the state level, the feds always get their pound of flesh). Many people don’t follow this rule but it’s smoothed over by reciprocal tax agreements between states. Companies are usually good about tracking this stuff and paying taxes appropriately, employees are usually not but the company pays the taxes correctly and so the employee lucks into doing their taxes correctly. Consultants will often find themselves confused after receiving a mean letter the first time they fuck this up because most people think as you do.

jimmaswell 4y ago
Each state has different rules. For one example Illinois doesn't tax remote workers of companies in Illinois who don't live in Illinois.
- bombcar 4y ago
  Does any state do that? I'd think it could cause a civil war damn fast. The nexus is "where the work is performed" or "where the employee resides" and usually states have agreements with the neighboring states so it balances out.
  - superdude12 4y ago
    New York State does this. No civil war so far.
  - lesuorac 4y ago
    Did you miss the part of covid where a bunch of multi-state commuters stopped commuting? https://www.njspotlightnews.org/2022/09/nj-remote-workers-ny-companies-income-tax-murphy-proposal-property-tax-u-s-supreme-court-legislation-legal-battle/ https://www.njspotlightnews.org/2022/09/nj-remote-workers-ny...
mr337 4y ago
Yeah, this whole bit is really confusing. Some states have tax agreements as well. I think Illinois and Arkansas has an agreement. Also eyeballing CA as they send us one of those mean letters you speak of. That was "fun" to sort out.
jeroenhd 4y ago
Income is also taxed if it's generated outside America as long as you're an American citizen. Some people who emigrated to Europe as a child got quite a nasty tax bill for decades of untaxed income when the USA found out that they're still American citizens, for example. Many countries have tax law to deal with this type of American bullshit but it's still something to be aware of.

dfxm12 4y ago

States are usually based around where you are more than half the year. Just live in 3 different states for ~33% of the year each and you don't have to pay state taxes? Must be easy in NY/NJ/CT. :)

tenarshins 4y ago
Just live in a state with no income tax.

gamblor956 4y ago

In the US we generally tax based on where you live, not where you temporarily reside. Nope, sorry, completely wrong. You pay taxes to the states proportionately to how much time you spent in the state for the year. Many states don't even have a "floor" for how much time an employee works in a state before they're required to pay income and payroll taxes to that state, so in some states even one day working in that state triggers tax. Consulting firms track employees time spent in each state down to the hour so they can properly pay payroll taxes. Many consulting firms will even pay for tax return prep for employees required to work in other states long enough to trigger tax compliance.