The Tax Preparation Blog

Posts Tagged ‘business’

Question: tax question: how to report lump sum payment from foreign retirement account?

my wife (resident alient) got her retirement account paid out from here japanese employer when she quit. she paid japanese taxes on this. For the life of my I cannot figure out how to report this income and tax. form 1116? form 4972? any help is appreciated.

Answer: The U.S. and Japan have a treaty that states that income can not be double taxed by both countries. Check out www.irs.gov for more information.

Taxpayer Advocate Pushes for Fewer Tax Liens

National Taxpayer Advocate Nina Olson said the IRS needs to do better than answering only 71 percent of the calls it receives from taxpayers, and it should stop filing tax liens against people who don t have the ability to pay.

Health Care and Tax Reform

Question: What are the income tax implications when living in NJ and commuting to NYC (Manhattan)?

I live in Northern NJ and i’m entertaining job opportunities in Manhattan(NYC) some people tell me that i need to account for “double taxes” when negotiating for a salary. I just want to know how much more i should expect to pay in taxes when working in NYC vs. any other location in New Jersey. Thank you in advance for any insight you can provide.

Answer: Contrary to what Walter said, MOST states tax income that is earned in their state. There are some states that have reciprocal agreements with neighboring states that will not tax residents of those states. This is the exception, not the rule.

You will need to file a resident return in NJ and a non-resident return in NY. I don’t think you will be liable for NYC taxes. You will get a credit on your NJ return for taxes paid to NY. The credit will be equal to the lower of the taxes paid to NY or the tax NJ charged on the income.

Your employer does not have to withhold NJ tax unless he has a location in that state. He will withhold NY tax. So, in that sense you are double taxed. You may owe NJ tax because none was withheld, but with the credit, its as if you where only taxed by one state.

Two Shootings in Charleston

Two shootings in Charleston early Monday morning but no arrests.

Sales & Use Manager – Norwalk, CT