Posted on

If You Work Remotely Where Do You Pay Taxes?

You work from home…but where do you pay taxes?

In our post “Living in One State, Working in Another“, we explained how to file state taxes if you work in one state but live in another.

However, with all the (exciting) advances in technology, more and more individuals are trading in their commutes to the office to instead work remotely from home.

If you work remotely and the company you work for is in a different state than you live in, then your tax situation will differ from someone who physically travels to another state for work.

We understand that you may have no idea how to file your state taxes. We’re here to help!

File taxes to one or two states?

Depending on your specific tax situation, you may need to file two state tax returns; a resident return and a non-resident return. Continue reading “If You Work Remotely Where Do You Pay Taxes?”

Posted on

How to File Taxes for a Deceased Person

Once the inevitable hits, it’s best to know how to deal with it. Let us help you with the tax side.

Death and taxes are two topics that no one wants to have a conversation about. However, they are two hurdles in life that every person is eventually faced with. Unfortunately, they can arrive together – when a taxpayer dies, there needs to be a final tax return filed on their behalf. We’ll tell you who needs to do this, what needs to be reported and how to get it done.   

Who is responsible for filing a final tax return?

A final tax return will always need to be filed after a taxpayer’s death, but who needs to do this will depend on the filing status of the deceased taxpayer on the day they passed away.

Were they married?

If the taxpayer was married when they passed away, then the IRS considers the couple to be married for the entire year for tax purposes. The surviving spouse is responsible for filing the tax return. In this case, the surviving spouse would file as married filing jointly, or qualifying widow(er) with dependent child.

If the surviving spouse plans to file a joint tax return, they are only able to do so for the current tax year in which their spouse has passed. In following tax years, they must file as qualifying widow(er) with dependent child, head of household, or single.

In order for the surviving spouse to file as a qualifying widow(er) with dependent child, specific requirements must be met. The surviving spouse must have: Continue reading “How to File Taxes for a Deceased Person”

Posted on

Who Determines Which Parent Claims a Dependent Child?

Claiming a dependent on your taxes can shave off a good amount of your tax liability.

Sometimes, the real issue lies in the rule that only one exemption can be claimed per dependent. This is an IRS rule, and one situation where absolutely no exceptions apply. So if there are two parents who are not filing jointly, and one child, you can see how this has all the makings of an impromptu game of tug-o-war.

So who wins? This question is asked to countless accountants, lawyers and tax professionals each day. The answer is simple. Accepting the answer is the tough part.

The custodial parent can claim the child as a dependent. The non-custodial parent cannot.

Who determines which parent can claim the child dependent exemption?

Contrary to popular belief, a court order will not determine which parent can claim a dependent child. You can wait on hold with the IRS as long as you want. The answer will always come down to federal law; not a state or county court order.

Custodial Parent VS. Non-Custodial Parent

Assuming your child probably refers to you as mom or dad, ‘custodial parent’ is typically not a term thrown around in most households. Generally speaking, the parent with whom the child lives for the majority of nights during the tax year is the custodial parent. The non-custodial parent is the other parent. If the child lived with each parent for the same amount of nights per year, then the custodial parent is the one with the higher Adjusted Gross Income. Continue reading “Who Determines Which Parent Claims a Dependent Child?”