Cincinnati Taxes (Mason, Madeira: house, schools, contractors) - Ohio (OH) - Page 2 - City-Data Forum

Wilson513 · 10-12-2010, 04:27 PM

Work out of state but live in Cincinnati? Always live in Cincinnati? Pay taxes in another city where you work? Where?

oldhousejunkie · 10-12-2010, 05:36 PM

Ok, let me get this straight: Cincy taxes the money that I earn at work? Like the feds or the state? Or are we talking about working for yourself or owning a business?

progmac · 10-12-2010, 06:03 PM

Quote:

Originally Posted by oldhousejunkie

Ok, let me get this straight: Cincy taxes the money that I earn at work? Like the feds or the state? Or are we talking about working for yourself or owning a business?

Yes, you got it right. If you work in the city you pay a 2.1% tax on all of your earnings. There isn't a way around this.

jlawrence01 · 10-12-2010, 09:20 PM

Quote:

Originally Posted by oldhousejunkie

Ok, let me get this straight: Cincy taxes the money that I earn at work? Like the feds or the state? Or are we talking about working for yourself or owning a business?

In Ohio, you pay city income tax to the city work in. Additionally, you pay local income taxes to the city you live in. USUALLY, but NOT ALWAYS, you get some credit in the city you live in for the taxes you paid to the other city. It is absolutely a CPA's dream.

When I lived in the Cleveland area, my wife would work in as many as EIGHT communities and we would file tax returns in most of them.

If you own a business or work for yourself, there is a solution. Put your business in an unincorporated area like Anderson which has no local income tax.

rrtechno · 10-13-2010, 07:01 AM

Quote:

Put your business in an unincorporated area like Anderson which has no local income tax.

That doesn't always work out. I was a self employed IT consultant for a short while. I had a contract with a client in a neighboring community. Any part of that contract that was actually fulfilled while I was onsite at their location was taxable in their community. Any part of the contract that I was able to complete from my office was not. A real nightmare for recordkeeping. The recordkeeping for that one contract drove me out after a year.

kjbrill · 10-13-2010, 08:06 AM

I believe if you are employed in Ohio, either self or working for someone else, and the work is performed in various cities by either individual job or contract, you are required to pay income tax to the city where the work is performed. I think it gets quite complicated when you start to differentiate between physical purchases and service. For example, if I purchase a large tag item for my business, and it requires a substantial amount of installation, are those installers subject to local city income tax or not, since the purchase was capital investment, not service oriented. You CPAs chime in here.

For a small, service type business, this can be quite a bookkeeping nightmare. I remember when my mother did all of the books for my dad's painting business, and the employees would complain about the job assignment depending on whether it was in an income tax area or not.

As has been commented, in Ohio you can have income tax where you work and where you live. Most, but not all have a tax credit in the amount of where you work. The first one who collects is where you work. You owe them period. This is why if you claim self-employed you need to be careful about just where you perform the actual work.

oldhousejunkie · 10-13-2010, 08:45 AM

Wow. We don't have municipality taxes here in SC. Well just on property taxes.

So if I lived in the city and worked (for the someone else) in the city, I would just pay income tax to the city. Whoa.

So does this income tax get offset somehow? Lower property taxes or lower sales taxes or something?

kjbrill · 10-13-2010, 09:31 AM

Nope, the municipal income tax is just that, an income tax. If it does anything to hold down the property tax levies cities go for is arguable.

Ohiogirl81 · 10-13-2010, 09:53 AM

Quote:

Originally Posted by kjbrill

If it does anything to hold down the property tax levies cities go for is arguable.

When I lived within the city limits, my property taxes were half of what my next door neighbors in Columbia Township paid. Our school tax and county tax rates were identical, so ... What was different? Municipal property taxes.

I received a reasonable value for my 2.1 percent income tax when I lived in the city; it was a pretty small price to pay for trash, large-item, recycling and yard waste pickup, free fire/emergency services protection (which my neighbors paid extra for in tax levies), etc.

oldhousejunkie · 10-13-2010, 10:50 AM

Quote:

Originally Posted by Ohiogirl81

I received a reasonable value for my 2.1 percent income tax when I lived in the city; it was a pretty small price to pay for trash, large-item, recycling and yard waste pickup, free fire/emergency services protection (which my neighbors paid extra for in tax levies), etc.

Yeah, those types of things are covered by our property taxes. Now I live in the city here, so I pay city and county property taxes, but I can't argue since my bill is under $800/year for a $90,000 house. What they nail you here for is if the property is considered income producing. The rate nearly doubles. And yet it doesn't seem to deter the slum lords in my neighborhood.

I've just never heard of a city taxing income made. That's such an odd concept to me. Are there other states that have cities that do that?