Simplifying Remote Work Management with Integrated Tech

Given the ever-changing tax landscape, this may not be the year to rely on free tax software. Thirty-two states have graduated income taxes similar to the federal income https://remotemode.net/blog/how-remote-work-taxes-are-paid/ tax. Ten states have a flat income tax, and nine states have no income tax at all. Here are some tips to assist remote workers in navigating their 2021 taxes.

When you’re crystal clear on what you need to pay, you reduce your risk of overpaying or incurring tax penalties. Price can also be a factor when hiring a tax professional for this most unconventional of filing years. The price of tax preparers can vary wildly, and it may be beneficial to fork over a bit more than you typically do for someone who knows the new guidelines and can adequately file your remote-worker return. Doing your due diligence when hiring a true professional will give you peace of mind in the long run. One of the most important things in properly filing taxes as a remote worker is enlisting the help of a qualified tax professional to assist in filing.

How taxation works for different types of remote workers

The answers, unsatisfyingly, depend on a number of factors, including which states and how long you were there, according to tax experts we spoke with. Ahead of tax season, here’s what to look out for when filing your taxes on remote work. Working remotely can be a boon or a bust for your taxes, depending on where you live. If you spent most of the year living out of a van or bouncing between Airbnbs, you probably want professional help with your taxes. Depending on where you lived, how long you were there and how much money you made, you could owe taxes in multiple states and cities, a problem athletes and entertainers have had to deal with for years.

However, some states use “convenience of employer” rules that require you to pay taxes in your state, not the employee’s state. Additionally, double taxation risks, such as those for employees who commute across state lines, can still exist in some states. In a traditional, in-person work environment where your employees live and work in the same state as your organization, there’s less uncertainty to navigate.

Where to find November’s flipbook issue

Then they extended this, in some other cases, beyond just local telecommuters to people who were working remotely from across the country. Timothy Noonan of Hodgson Russ LLP discusses how some states tax remote employees and the effect of temporary pandemic tax changes. As you look beyond the pandemic, Deloitte can show how the tax https://remotemode.net/ function can play a bigger role to help protect and create value for your business. Our experienced tax and human capital professionals and innovative technology solutions can support you. Together, we can align your strategy, policy, and operations to address the potential talent and tax implications of hybrid and remote work.

In addition, I encourage you to follow up with a certified tax professional who is familiar with your new state and local taxation regulations. If you have a telecommuting employee in a different state than your office location or have employees in multiple states, you must withhold income taxes for the state they live and work in. You’ll pay unemployment taxes and report their income to the states where they live, not your state.