You Want Me To #*%^&* What?
You heard right.
If you’re American and worked remotely from a different state while waiting out the pandemic, you will probably face a tax surprise when you file in April.
You know, that time in 2020 when the government and your boss said you weren’t allowed to go to work and had to log in remotely. And you had to make and drink your own coffee and pay through the nose for those anti-depressants that helped you cope with forced isolation and social withdrawal…?
You better hope and pray you didn’t do any of the above from a different state than the one in which you’re primarily domiciled. Because if you dared to work remotely from anywhere BUT your home base, the odds are great that you will be on the hook for two or three state tax returns.
All because you’ve been working on the go. As you were compelled to do.
The aptest quote to describe this travesty is by Benjamin Tucker, who said, “To force a man to pay for the violation of his own liberty is indeed an addition of insult to injury.”
Many remote workers might not understand that they’re on the hook for more state taxes until they file their returns in the spring.
Or no surprise if you’ve been following me on our Unconventional Entrepreneur channel or already subscribe to LIBpreneur.
In November, I told you about Deutsche Bank’s proposal of levying a 5% tax on remote workers for the privilege of doing their jobs from home. The rationale? Remote workers are not contributing as much as they were to the economy because they're not commuting or buying lunch by the office or grabbing that afternoon coffee…
A few weeks later, DB went a step further when on 30 November, the Bank announced its plans to permanently force staff to work from home twice a week.
Your choice is clear:
- John Maynard Keynes said “The avoidance of taxes is the only intellectual pursuit that carries any reward”.
- So there’s that, or you can bend the knee to CNBC’s call on tax-paying workers to be honest: Be upfront with your employer about where you’re working during the pandemic. Keep track of where you worked remotely this year, and update your state tax withholding accordingly.
Or according to the American Institute of Certified Public Accountants (AICPA): States can detect taxpayers who are skirting the law, so keep track of the states where you’ve worked remotely and the amount of time spent there. Please be specific about your location because cities and counties also levy income taxes.
Watch the video to see which option I would go for and why. Then join us to learn how to break free from taxes, banks, and bureaucrats – 100% legally!
But Wait, There’s ANOTHER Tax Surprise Just for You
If you are unemployed in 2020, you could also be in for a surprise tax bill! Remember those stimulus checks and $600 weekly benefits up to the end of July 2020, thanks to the CARES Act? You might very well be liable for taxes to the federal government and their state this spring.
Oh, Yeah… That’s Not All, Folks!
IRS is going on a data fishing expedition and ‘setting the trap’ for bitcoin and virtual currency investors on the 2020 tax form by adding a new question about it near the top of the new Form 1040.
The form released in December asks: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” The only option is to mark yes or no. If you answer inaccurately, you could find yourself in hot water with Uncle Sam, who is rooting out tax evaders – so take heed.
The net is squeezing tighter, and the only fish who will survive are the ones who jump out now.