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Advice on Income Taxes for the "Virtual Office"

Posted by Cliff on from the telecommuting-tips dept.

Silas asks: "I've been working for a website development firm in Indiana, but will soon be moving from Indiana to Ohio. From Ohio, I'll continue to work for that Indiana-based firm via phone, e-mail, and the occasional commute. I'm wondering what the implications are for income taxes - namely, am I living and working in Ohio, or am I living in Ohio and working in Indiana, or some weird mutation of those? Any advice from others working in similar 'virtual office' situations?"

"Some additional info is below for IANAL and IAAL readers alike:

  • The firm is an LLC based in Richmond, Indiana. I'm moving to Cincinnati, Ohio.
  • I am an owner/partner of the firm, so my taxes are paid as quarterly estimates instead of being drawn from each paycheck.
  • I'm interested in legally minimizing the chunk of income that the gub'ment gets.
  • I'm interested in keeping my tax return as simple as possible.
Thanks for any assistance you all can give me on this matter."

3 of 40 comments (clear)

  1. In similar situation. by phUnBalanced · · Score: 3, Informative

    I currently live in Maryland and work for a company in NY.

    Tax wise I reside in Maryland and pay taxes here. My company withholds Maryland Income Tax for me automatically so if there's anything complicated, they handle it on their end, but as far as I know, you always pay income tax based on where you reside.

  2. Ask Google by netringer · · Score: 4, Informative

    http://www.in.gov/dor/assistance/index.html
    https://ohiocrm.das.state.oh.us/tax/default.asp?2= default%5E20&10=TAX

    It looks like Indiana and Ohio have some sort of recriprocal agreement on income taxes.

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  3. Going there myself by Pointer80 · · Score: 2, Informative

    I currently in the process of relocating (so my wife can finish her MS) to Illinois from the South... :)

    Here's the scoop that my company's accountants and lawyers dug up. I'm not a lawyer or an accountant (insert the rest of the standard disclaimer here)...

    Since I will be residing in Illinois, I will pay Illinois state taxes (and Chicago Income taxes as well :\). My employer had to get a tax id from the state of Illinois. AFIAK, that's all that was required in my situation.

    My employer was even nice enough to transfer my health insurance into a group local to Chicago!

    -pointer

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