Philly Wage Tax Question (Philadelphia: renting, credit, home)

[Hobokenkitchen]

Is the Philly wage tax baased off of gross or net pay if you are self employed?

For example as a realtor I normally pay tax off of my income in commissions less my expenses. Does the same go for wage tax? I REALLY hope it doesn't come off the top gross.

HATE Philly wage tax!!!

[TracySam]

I don't know that answer. But knowing how Philly operates, it would be whichever option costs you more money!

[bryson662001]

It's on gross but only on wages, not commissions. It isn't an income tax.

[BPP1999]

If you are self-employed and file your business income on a Federal schedule C then I think you will be subject to the BPT, which consists of 2 parts. The gross receipts tax (based on your gross income (around 0.17%), and net profits (which is 6.5%). There's also the NPT, which is a tax on the net profits of a partnership, but I don't think you will be subject to this. If you are, there is a credit toward the NPT that's equal to 60% of the BPT you pay, so it helps take the bite out of the NPT.

Google "Philadelphia revenue" and check out the income and business tax regulations.

[bryson662001]

Just between us......this is all on the honor system. No one is going to come looking for you. I ran a business for years out of my home renting space in a commercial building I owned to tenants and paid myself a "commision" which became a business expense, filed state and federal returns (it was a partnership) and never gave the city a dime. I even collected "use & occupancy " tax from my tenants and turned it into the city. At first I didn't know about the Business Privlige Tax and Gross Receipts Tax and when I found out after a few years decided what they didn't know wouldn't hurt them.