X Marks the Scot - An on-line community of kilt wearers.
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25th November 09, 07:12 AM
#17
Definitely consult an accountant or tax attorney for the paperwork. But the general rule of thumb is, if during any part of a given year you earn money in two different states or work in one and live in another state, you end up paying taxes in both states. The state in which you perform the work typically takes its cut first---if the state in which you live has a higher tax rate they will figure this higher tax amount, then subtract the amount you paid in the other state, and make you pay the difference only to them. If the state in which you work has the higher rate then the state in which you live gets nothing extra. When you work in two states in the same year the same general rule applies, although the distribution of said taxes gets more complicated, as each state wants its share of what was earned in that state, and the one with the higher rate wants more in addition to that from what was earned in the other (lower rate) state. This is why an accountant or tax attorney is needed--to make the paperwork and money go where it is supposed to go.
I have a freind who over the last several years lived in one state, had drivers licenses at various times in various states where he was working (which has compounded the problem a bit) and living part time, but over the last couple years has worked in several other states, sometimes several in one year---he is up to his eyeballs in attorneys paperwork trying to make sure he does not owe any back taxes anywhere.
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