Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
As you may have noticed, the country is facing budget crunches on all sides. The feds are billions of dollars in the hole, while states are cutting jobs, holding up refunds, and struggling to stay solvent. No one wants to raise taxes, but the money must come from somewhere.
What’s the easiest way to generate money without raising taxes? Find more ways of collecting taxes. For states, that means cashing in on the earnings of out-of-staters who are filing taxes—those folks who only work in the state temporarily or those who have a shadow of a presence.
How are the states doing this? Three ways: one tax for individuals, one for businesses, and one for both individuals and businesses.
Three state taxes you may need to know:
1) The Jock Tax. States started taxing athletes, performers, and others who work in their states for a few days. After all, these individuals often earn as much in a day or two as you or I earn in a year.
States have graduated to taxing ordinary mortals for working there for a few months. New York even established a precedent by taxing individuals who don’t work in the state or are not filing taxes. Yup! Thomas Huckaby worked for a New York corporation from his home in Tennessee. New York assessed income taxes against him—and won.
Why did New York win, even on appeal? Because Huckaby was working from his home in Tennessee for his own convenience and not for his employer’s benefit. Even the IRS takes that into account when looking at the office in home deduction for employees. You cannot use that tax benefit unless you are working at home for your employer’s convenience.
Another problem that arises: people who are moved to another state by an employer. When those people get their W-2s, there’s no withholding for the new state. It’s the individual’s responsibility to alert his or her payroll department that the state withholding needs to be changed. Who else will?
2) The Use Tax. Odds are, you do some of your shopping online. Many Internet-based stores don’t charge sales taxes in your state. Your state knows that. States are either adding a use tax line to your income tax forms or are requiring that you file a use tax return to report major purchases. You have two ways to report your purchases—either keeping track of the big purchases (computers, appliances, and so on) or by using the tables your state provides.
When you track your untaxed purchases, keep tabs on the downloadables vs. the physical goods. Downloadables are usually not subject to sales taxes in most states.
3) Sales taxes. This issue mostly affects businesses, not individuals. The question of state taxes has always been a major one with mail order houses located in one state that sell and ship to another state. You had to be pretty big—think Amazon.com—to get the attention of a state government. Today, even home-based operators can ship hundreds of thousands of dollars of merchandise into a state—think eBay sellers.
Several states require you to collect and pay sales taxes if you have nexus in the state. Nexus means any kind of physical presence. Having affiliates or sales agents may be enough for you to have nexus in a state.
Consult with your tax pro to determine how to restructure your marketing model to protect yourself from complex multi-state taxation. After all, registering for sales taxes also means registering for income taxes in that state.
Money Management Tips: Storing Your Paperwork
Last-Minute Ideas for Saving Money on Your Taxes
Documenting Your Donations for Tax Deductions
Tax Deduction for Claiming Elderly Relatives and Dependents
Tax Tips: Tax Implications of a New Baby
Paying Taxes on Self-Employed or Side Income
Eva Rosenberg, EA is the publisher of TaxMama.com , where your tax questions are answered. Eva is the author of several books and ebooks, including the new edition of Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com and tax courses you might enjoy at http://www.cpelink.com/teamtaxmama.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.