Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
you pay state taxes in the income you earn in that state....
You can't make a blanket statement like that because it is not always true. See below.
Quote:
Originally Posted by mathjak107
Having established that it now depends on which states you earn an income in and the agreement the states have.
As an example if you live in pa but earn an income in new york you pay your taxes to ny first and then take them as credit against your pa taxes.
If nothing is left than pa gets nothing.
Pa has a different agreement with maryland . You pay pa taxes first even if you earn an income in maryland .
Exactly.
Maryland has similar agreements with Virginia and Washington, D.C. You pay state taxes based on where you live, not where you work.
Live in MD & work in VA --> pay MD taxes
Live in MD & work in DC --> pay MD taxes
Live in VA & work in MD --> pay VA taxes
Live in VA & work in DC --> pay VA taxes
Live in DC & work in MD --> pay DC taxes
Live in DC & work in VA --> pay DC taxes
I am currently employed in CA for a CA company so I pay state tax. I don't own a place here (yet) my vehicles are licensed in Alaska, I vote in AK own a home (rented) and all the electric gas water etc are in my name. So far so good. I plan to go back home this year for about a month and 4 months next year. Either wasy with the FTB it's a fight. They are the bully here....pure and simple
I think the simple fact of the matter is that if you have any connection with a high tax state (or any state with an income tax if you also have contacts with a state without an income tax) - whether it's living there - or earning money there or whatever - the state with taxes is trying to find a way to tax you. It is best to consult a CPA in the taxing state to see what you can do to avoid tax in that state (if anything). The rules vary a lot from state to state - and - as mentioned previously - some states have agreements with other nearby states about how you get taxed.
A poster above alluded to how things work with regard to professional athletes. You can live in Florida - play for a professional Florida sports team - but still owe state income tax in various states when you play games in that state (even though Florida doesn't have a state income tax). Like I said - best to consult with a professional about the specifics of your personal situation. Robyn
I am currently employed in CA for a CA company so I pay state tax. I don't own a place here (yet) my vehicles are licensed in Alaska, I vote in AK own a home (rented) and all the electric gas water etc are in my name. So far so good. I plan to go back home this year for about a month and 4 months next year. Either way with the FTB it's a fight. They are the bully here....pure andsimple
For the benefit of non-California posters, the FTB mentioned above is the [California] Franchise Tax Board, the agency which is the state equivalent to the IRS.
So far this has been a technical issue, with several posters wisely recommending contacting a tax professional. The more technical the issue, the less I would be willing to rely on anonymous posters on a public internet discussion forum, and this is a highly technical issue.
However, you just departed from the technical questions and started to editorialize (what I bolded above). I wish to respond to your editorial. First, I think all of us, and I include myself, would make efforts to inform ourselves in order to minimize our tax liability; that is called playing the game by the rules. But let's pause for a moment and consider your "bully" accusation.
You are "currently employed in CA for a CA company". You wish to see if there is a way to avoid paying CA taxes. Fair enough so far. But you and I part company when you imply that it is unfair for you to pay those CA taxes, and that is what is implied by the "bully" charge. Yes, the FTB is tough - that is their mandate, namely to collect taxes which are legitimately owed under law to the state of California. Why should you get off if the law says you have to pay the taxes? As a full-time resident, it is certainly not in my self-interest for you to get a free ride. Don't like it? Stay in Alaska then. No one held a gun to your head to force you to come work in our state.
Yes, the FTB is tough - that is their mandate, namely to collect taxes which are legitimately owed under law to the state of California. Why should you get off if the law says you have to pay the taxes? As a full-time resident, it is certainly not in my self-interest for you to get a free ride. Don't like it? Stay in Alaska then. No one held a gun to your head to force you to come work in our state.
Yeah, but to be fair, "legitimately owed" can be subjective and California does sometimes get carried away in trying to collect income taxes. For example, California used to try to tax the pensions of former residents who retired to low-tax or no-tax states. California claimed that since the pensions were earned while the former residents were working in California, it then had the right to tax the pensions of the former residents because the source of the pensions was work performed in California. It took an Act of Congress in the mid-90s to get them to cease and desist from doing so. (P.L. 104-95)
For the benefit of non-California posters, the FTB mentioned above is the [California] Franchise Tax Board, the agency which is the state equivalent to the IRS.
So far this has been a technical issue, with several posters wisely recommending contacting a tax professional. The more technical the issue, the less I would be willing to rely on anonymous posters on a public internet discussion forum, and this is a highly technical issue.
However, you just departed from the technical questions and started to editorialize (what I bolded above). I wish to respond to your editorial. First, I think all of us, and I include myself, would make efforts to inform ourselves in order to minimize our tax liability; that is called playing the game by the rules. But let's pause for a moment and consider your "bully" accusation.
You are "currently employed in CA for a CA company". You wish to see if there is a way to avoid paying CA taxes. Fair enough so far. But you and I part company when you imply that it is unfair for you to pay those CA taxes, and that is what is implied by the "bully" charge. Yes, the FTB is tough - that is their mandate, namely to collect taxes which are legitimately owed under law to the state of California. Why should you get off if the law says you have to pay the taxes? As a full-time resident, it is certainly not in my self-interest for you to get a free ride. Don't like it? Stay in Alaska then. No one held a gun to your head to force you to come work in our state.
I am not even going to bother to respond to this judgemental nonsense.
I appreciate the opinions posts heresay and professional recommendations.
Yeah, but to be fair, "legitimately owed" can be subjective and California does sometimes get carried away in trying to collect income taxes. For example, California used to try to tax the pensions of former residents who retired to low-tax or no-tax states. California claimed that since the pensions were earned while the former residents were working in California, it then had the right to tax the pensions of the former residents because the source of the pensions was work performed in California. It took an Act of Congress in the mid-90s to get them to cease and desist from doing so. (P.L. 104-95)
Good point, but it's been 15 years since the mid-90's.
The FTB routinely misinforms residents, attempts to collect monies to which it is not entitled, and is deceptive in its business practices. I submitted a response in ten pages with cancelled check which shows I had previously paid money they say is owed to them. I received a phone call back 2 months later which they stated was my only chance to speak with them. The number which called me was blocked. I encouraged them to speak to my CPA which they refused to do. I let the woman have it with both verbal barrels and to her credit she took it. By the end of the 45 minutes she agreed (tearfully) to offer a phone number where my guy could call. I asked her for another auditor closer to his location and she refused.
When asked routine questions she refused to discuss known facts. She attempted to hide information which would have led to a fair exchange of information.
The FTB is in the "business" of getting money for the state of Cali. Now nearly bankrupt, on the edge of default in many cities, their "job" is to get money fair or not.
As I think of this seems to me that honoring a relationship to pay for services means that the other party is fair and square. That ain't the way it is in Cali. and if I can beat 'em more power to me.
Now back to the original question. I appreciate the fact that my CPA may be very helpful. I routinely travel to other states and pay no taxes on my income as long as my stay is temporary and I am employed by a contractual agency who employs me (not the company in the state).
If you have skills and go through a company which supplies people to a location, you are not obligated to pay the state tax in my experience. Cali is a bit more tricky and for that reason I think the first suggestion of just working in Alaska esp if I own property here in "sunny cali" is a good one.
All states with income and similar taxes are different in terms of their rules when it comes to taxing people who do this - that or the other thing in their states. Living in Florida - a no-income tax state - and having no connection with any other state - I am agnostic when it comes to states with these taxes and their tax rules. Just makes sense to me to find out what they are before you do anything. Robyn
OP, like I posted before, if you are a nurse, there are nursing jobs in all 50 states, what's the point working in CA, which as you said is a very high tax state? Depending on what part of AK you are in, certainly the summer weather is good enough, and the winter is managable (consider the old Russian proverb - there is no bad weather, there is only inadequate clothing...)
I have visited around San Fran, and, yeah, the weather is mild year round, it's a pretty place, physically, but to me CA is a political basket case, I would never consider working and living there - I could do a contract stint of work if the price was right, but moving my domicile to the Land of the Governator ain't happening.
So, as Larry King would put it, what's your point? Why not just sell your CA holdings, move to AK and be done with it?
Full disclosure - I would consider AK one of the most desirable states to live in, or at least parts of it...
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Responding to the editorial
