Month: February 2018

Open post

Compliance? Is It Doable?

It is becoming an easy target by states in the recent years, to audit out of state companies’ traveler employees. New York alone increased its tax collections through an audit in the last several years by tens of millions of dollars, and the numbers grow exponentially. A large number

 

 

of the largest companies in the US has formed a coalition (theWorkforce Coalition) to try and pass a federal law to minimize their state tax withholding, and to transfer the non-compliance penalties from the employer to the employee. One of the arguments is that complying with so many different tax rules is extremely expensive and tracking employees whereabouts, in order to comply with states’ withholding requirements is impossible. Today, the only way, so the Coalition, to track employees whereabouts is via expense reports and time sheets submitted by the employees. Today, New York is the leading state to stand against this federal legislation, for obvious reasons, and it does not look like the Coalition will succeed in its efforts. So there is an obvious need to (1) enable employers to accurately track employees whereabouts and (2) to do that in a cost-effective way.

 

So far, it may make some sense (or so I hope) and seems straightforward, but let’s complicate it a bit. Because each state is sovereign to adopt its own rules, some states allow non-resident taxpayers a threshold until reaching of which, no tax is imposed.

 

Open post

Tax Residency

In most of the tax systems in the world, tax is imposed on a taxpayer based on such taxpayer residence (Residency Taxation) and based on the jurisdiction the income was earned (Source Taxation).

Consequently,  if you are a resident of a country, or a state for tax purposes, you will be subject to tax on your worldwide income, whatever source derived, at your country of residence. You may also be taxed at a jurisdiction where you earned income. In situations where a person paid tax at country of source, most often, the country of residency will provide tax credit for the amount paid at the country of source, to eliminate double taxation. Given that the state of residency imposes tax on the person’s worldwide income, it is crucial to understand how residency is determined, especially for individuals traveling for work, to avoid being subject to tax in more than one country, as a resident.

 

International – most of the countries in the world determine residency of an individual based on number of days present ion that country, and some countries also determine residency based on the “center of life” of the individual. Generally, if you are present in a country for 183 days or more (this is to say, 6 months and a half of a day), you are considered a resident of that country. A day for tax purposes is even a few hours, so it is theoretically possible for you to spend more than 183 days in more than one country.

 

Therefore, DAY COUNT COUNTS!

 

USA – in the US, you are a resident of a state if you domicile in that state. In some states (NY for example), you can also be considered a resident if you maintain a home in NY, AND you spent 183 days or more in that state (Statutory Resident). Stoping for coffee on the way to the airport from Connecticut to Newark airport, in a coffee shop (or to fill up gas at a gas station) in NY, counts as a day in NY. The potential double tax effect resulted in from being considered a resident in two states, one state as the state of domiciliary and the other as a statutory resident because of the time spent in that state, can be painful.

 

Therefore, DAY COUNT COUNTS!

Open post

I Can File and Pay Once a Year! Or Can’t I?

Like any other creditor, tax authorities would like to get their dues as soon as possible. New York, for example, requires that every employer must file, within three days after the payroll period, a return and pay the tax withheld from its employees after each payroll period (in most cases, every two weeks) that causes the total of tax required to be withheld in excess of $700. In addition, New York requires an employer to file a quarterly return to report the compensation and the tax withheld. New York allows to remit withholding taxes that have not been remitted during the quarter, without penalties or interest, but only so long as such amount is not in excess of $700. So if you failed to withheld and pay the tax to New York, and the amount is in excess of $700, interest will be charged.

So to your question, YES you can pay the tax only once a year, but that amount will include a 9% interest (annually) computed from each month you failed to pay the tax, till the payment date. That’s an expensive loan, isn’t it?

Open post

Imera Residency Tracker

Imera assists you to track State Residency for tax purpose

Imera is travel tracking application that helps individuals to track, log, and count their days on any tax jurisdiction and manages their tax residency based on number of days present in each tax jurisdiction.

Real-time tracking

imera uses your mobile device’s location to track time you spend in specific jurisdiction and show how many days you’ve spent in each state and how many days you have left

Security and Privacy

Your data is private and safe, imera stores your data securely in the cloud. imera track time spent in tax jurisdiction and not specific locations.

Reporting

imera provides detailed reports to prove state residency in case of an audit. Calendar view support

Historical Data

imera support Google Location history data import.

Scroll to top