Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 04-16-2015, 12:04 AM
Junior Member
 
Join Date: Apr 2015
Posts: 1
Estimated Taxes for New York

Hello:

I moved to New York in the middle of last year. I started working in Connecticut shortly thereafter. My employer only takes Connecticut taxes out of my paycheck and will not take out New York taxes.

I went to H&R Block this year to have my taxes prepared and ended up owing about $1500 in taxes to New York based on being here about five months. To avoid a similar situation in 2015, my tax guy told me to have an additional amount withheld from Connecticut. He did not mention estimated payments.

In fact, I just learned about estimated payments today and am slightly confused by the advice I received. Why would I withhold the additional amount from CT when that amount should be going toward estimated payments? Won't the tax professional's advice only cause me penalties and interest?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 04-17-2015, 09:10 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
I moved to New York in the middle of last year. I started working in Connecticut shortly thereafter. My employer only takes Connecticut taxes out of my paycheck and will not take out New York taxes.=====>In that case,as there is no reciprocal agreements between NYS and Connecticut, I guess , you need to report Connecticut source income to Connecticut as a non- resident of the state and you need to claim tax paid to Connecticut on your NYS return as a part year resident of NYS. You would generally only take a credit for taxes paid to Connecticut on your part year resident return if the amount of income that is being reported as taxable to the NYS state includes wages that were actually taxed by Connecticut.

I went to H&R Block this year to have my taxes prepared and ended up owing about $1500 in taxes to New York based on being here about five months.=====>>You may owe tax to NYS even if you paid ax to Connecticut on your Connecticut source income as a non resident of the state ASLONGAS NYS tax rate (so tax liability based on NYS tax rate after the tax credit on Connecticut tax is still higher than your Connecticut state tax credit );

To avoid a similar situation in 2015, my tax guy told me to have an additional amount withheld from Connecticut. He did not mention estimated payments. ========>>As said, aslongas NYS tax rate is higher than that in Connecticut, so after you claim your Connecticut tax credit, you may owe tax to NYS, to avoid this situation, you may adjust your W4 with your employer in Connecticut to have your Connecticut employer withhold additional amount from your paychecks . In general, as W2 regular employee, you may have your employer withhold additional amount from your paychecks by adjusting your W4 instead of paying quarterly estimated taxes to Connecticut. Most W2 employees who have federal and state income taxes, fica taxes withheld from income as part of payroll generally do not have to pay estimated taxes on that income. These withholdings can be seen at the end of the year on W-2 statements. However when an employee has additional sources of income, such as a side consulting business, rental property income, or significant stock transactions or dividend payments, estimated tax payments may be required.

In fact, I just learned about estimated payments today and am slightly confused by the advice I received. Why would I withhold the additional amount from CT when that amount should be going toward estimated payments? Won't the tax professional's advice only cause me penalties and interest?======>>>>>>>>>Even if your employer withhold taxes from your paychecks, your NYS tax liability can be still higher than taxes withheld in CT, in this case , you need to request your CT employer to withhold more from your paychecks to avoid paying tax to NYS. As said above, you actually do not need to pay quarterly estimated taxes. Please read above.To increase the amount of federal/state income tax withheld from your paycheck,you need to file a new Form W-4 with your CT employer to reduce the number of allowances you claim on the form. . You're required to fill out this form when you start working for an employer, and you can fill out a new one whenever your circumstances call for a change in the amount of withholding or you may
request an "additional amount" to be withheld from your paycheck on line 6 of W4. This makes it fairly easy to determine the amount of the increase when you file Form W-4.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Credit for estimated taxes cmad Miscellaneous 1 12-10-2014 04:22 PM
Taxes for New York State LLC Mikerein555 Limited Liability Company 1 05-24-2012 08:53 PM
All employers in New York State (other than government agencies) are now required to provide each of their New York employees with an annual Notice under the New York State Wage Theft Prevention Act. TaxGuru New York 0 01-31-2012 04:42 PM
NJ schedule A, credit for taxes paid to New York nickG New Jersey 0 04-12-2010 12:33 PM
Estimated Taxes for new SB owner accountingwiz Estimated Taxes 2 09-19-2009 12:22 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.