Situation:
Taxpayer was a resident of Pennsylvania, but earned income while working at a job in another state.  Which state(s) does he need to pay taxes to?  Does he get taxed twice on the same income?

Most states impose a personal income tax on non-residents for all income earned within the state, and Pennsylvania imposes a personal income tax on residents for all income earned, regardless of where it was earned.

For a resident of Pennsylvania working in Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia, the taxpayer would only owe Pennsylvania taxes, as each of those states has a reciprocal agreement with Pennsylvania.  A reciprocal agreement between two states means that neither state will impose an income tax on wage income of the other state’s residents.

If the second state is any other state with an income tax, such as New York, the taxpayer would be required to file tax returns in both states.  On their Pennsylvania tax return, the taxpayer would receive a credit up to the amount they would have owed on that income in Pennsylvania.  In a state with an income tax higher than Pennsylvania’s income tax, like New York, the taxpayer would typically not end up owing additional taxes to Pennsylvania for the income earned in New York.  While the taxpayer reports the income to two states, the resident credit prevents double taxation.

Mark Breon, EA will be attending the IRS convention in Las Vegas the week of August 23rd-27th.  During that time, he will be working with the IRS case resolution team to solve difficult tax cases.  If you or someone you know has an issue with the IRS, please call 267-999-9002 in order to discuss your situation with us.  This is a once-per-year opportunity to resolve difficult cases.  Don't miss this chance to get back on track with the IRS!

If you are a business owner or salesperson, where do you get leads for your business?  Purchasing mailing lists, sending emails and direct mail, and cold calling are common answers, but networking organizations such as LeTip International and BNI are great resources that are often overlooked.  My experience with LeTip has been especially fruitful, primarily as a source of clients for my business, but also as a resource for myself and my clients.  My membership to LeTip has given me direct access to some of the top professionals in the region.  If I ever have a question for a lawyer, financial planner, marketing guru, Realtor, etc., I have the resources at my fingertips.


LeTip of Gwnedd is currently looking for a select few people to fill specific categories in our networking group.  The list below is a small sample of the types of people we're looking for, and changes regularly.  Check out the website: www.letipofgwynedd.com for more info, or give me a call for additional details.


Top categories we'd like to fill:
Auto Repair
Banker (Business or Personal)
Carpet/Flooring Installation
Dry Cleaning
Chiropractor
Floral Arrangements
Electrical Contracting
Plumbing
HVAC Contractor
Landscaper


 

BuxMont Accounting is officially open for business!  This website is under construction, and will be updated regularly as we bring additional features online.