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I got a job working for company in Maryland but I will be working in SC at home.
Hi,
I just got a job working for a company in Maryland, yet I will be working remotely at my home in South Carolina. I will be flying up to Maryland maybe once every month or so for a couple of days to show my face. Will I be filing both SC and MD state taxes.
I've never done this before so I'm not quite sure how it all works.
Also, when working at home for a company, do you know what expenses they will cover for me while working at home? .....i.e. phone, cable, etc.?
My work will be requiring being on the computer for the most part doing desktop publishing/graphic type work.
1. If you will not work in Maryland, then your employer should not withhold Maryland taxes and you don't pay Maryland taxes.
2. If you work in Maryland, then you will pay taxes in the Maryland for the period you were in Maryland.
On your SC tax return, you will report your full income. On SC tax return, you will also claim credit for taxes paid in MD.
I work at home in 1 state and my employer is in another state.
I pay state taxes for my home state. My employer pays for my paper, cartridges, internet bill and 1 phone line. My computer, fax machine, printer and cell phone is supplied as well as the upkeep.
I do know they will be supplying a laptop with all the software loaded, but I wasn't sure if I should ask (if they don't offer) if they would include phone, cable or whatever else.
MukatA has it right: the state of Maryland has NO LEGAL STANDING to tax your income if you neither worked nor lived in Maryland. The monthly visit to the Maryland does not establish working locus.
This would be a good time of the year to talk to a tax preparer or accountant to find out what you should be doing to make filing your taxes easier. They can also tell you what, if any, expenses will be deductible. You will need to make sure that SC income tax issue is properly handled & withheld by your employer, not MD otherwise it will be much more complicated for you later. You may not have to file taxes in MD if you are working entirely from SC but if your employer reports your wages to MD, they will probably expect you to file something with them verifying you owe no state taxes there.
Many will be glad to talk to you for at least a basic free consultation hoping to get your biz when it is tax time.
For tax year 2007, the Maryland income tax rate is set at 4.75 percent and it applies to the taxable income of residents and nonresidents who derive income from a Maryland source. Nonresidents are subject to a special nonresident tax rate of 1.25 percent, in addition to the 4.75 percent rate, for an effective tax rate of 6 percent.
Myth: I need to pay tax to the state my employer is based in
True or False? Linda, a full-time Maine resident, is a remote employee who works from home, handling customer service calls for an insurance company located in Ohio. She therefore needs to pay Ohio taxes on her income.
False. What matters is where she earned her income, not where her employer is located. Any income she earns while working in Maine is subject to Maine – not Ohio – income taxes. She should only have to file a Maine tax return.
However, if Linda's employer mistakenly withheld Ohio taxes (perhaps out of habit because most of their employees do work in Ohio) then Linda will also need to file a nonresident Ohio return to recover the erroneous withholdings. She'll declare that she earned no wages on her Ohio return, and TurboTax will calculate a full refund for Ohio taxes withheld.
I offer one addition to his scenario. When Linda files the Ohio state tax return, she should attach a copy of the Maine state return to show the Ohio state tax authorities that she IS paying state income taxes to her home state. This usually answers questions before they have a chance to be asked, and speeds up the processing of her return and refund.
As to what the company will cover, that often is a mtter negotiation or you can ask if they have a policy in place of what they will reimburse.
If they don't, make a list of what items you will need & ask not if they will be covered but how they will reimburse you for those expenses, then it's important to have that confirmed in writing.
Either send a follow up email saying "This is to confirm that we have agreed the following expenses will be reimbursed to me". Then list the ones agreed on.
Or ask they send confirmation that what expenses will be covered & the procedure you need to follow to get the money. But unless you get that very quickly (48 hrs) the first way you already have proof of what you were promised & who agreed that would be done.
That will avoid misunderstandings later & may get you more than if you rely on them to volunteer to pay those things.
Also the MD link in my other post will take you to the official state site in case you do need the non-resident tax form.
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