How Do I File Taxes If I Work Remotely? - The Accountants for Creatives® (2024)

FAQs

How Do I File Taxes If I Work Remotely? - The Accountants for Creatives®? ›

Typically, you'll pay taxes in the state you live in (unless that state doesn't have income taxes). But if you work in a different state, then you'll usually need to file a nonresident tax form in the state where you worked, listing the income and taxes you paid and earned in that state.

Where do I pay state taxes if I live in a different state than my employer? As a remote worker, you must pay tax on all your income to the state you live in (if your state has personal income tax). This is true no matter where your employer is located.

That means filing a resident state income tax form for your home state with all your income sources and a nonresident tax return with only your employment income. NOTE: If the tax rate in the state where you will receive a credit is lower than your home state, you may still owe some residual tax.

Generally, income can be taxed where you live and where you work. If those are the same state—as is typically the case with remote and in-person workers—then that's where you'll get taxed (with one exception; more on that below).

Content creators must pay taxes on their income, whether it's a hobby or a full-time job. Content creators who work as contract workers for brands are considered self-employed. Self-employment taxes must also be paid, and quarterly estimated payments can be made to the IRS.

Are there tax deductions for remote workers? Since the 2018 tax reform, generally only self-employed people can claim tax deductions for remote work. That means remote employees can no longer claim tax deductions for their work from home. Instead, employees should ask for reimbursem*nts from their employers.

So as a remote worker, you pay taxes to the country in which you reside. If you're an employee, your employer or EOR should deduct taxes from your paycheck according to local law. If you're a contractor, you are responsible for paying your own taxes in the country you reside.

Key takeaways

Internet bills are one of the work from home tax deductions self-employed individuals can take. Utilities are considered a home business tax deduction. When deducting a cell phone for business, you can only write off the business use portion.

California's anti-discrimination and harassment laws extend to remote work, ensuring that employers are obligated to maintain a safe and inclusive work environment, irrespective of the physical location of their employees.

The IRS having met the Biden administration's return-to office goals, is extending its remote work pilot program. The Internal Revenue Service, having met the Biden administration's requirement to bring federal employees back to the office more often, is extending its remote work pilot program.

How can I avoid double taxation in two states? ›

If this is you, how you file depends on if the states have a reciprocity agreement, which allows you to request a withholding exemption for your nonresident state. You might also have to ask your employer to withhold taxes for your resident state or make estimated tax payments to the state you live in.

Key Takeaways. Double taxation refers to income tax being paid twice on the same source of income. This can occur when income is taxed at both the corporate level and the personal level, as in the case of stock dividends. Double taxation also refers to the same income being taxed by two different countries.

If you are an employee of a business, even if you work from home 100% of the time, you can't deduct your home office from your taxes. If you're self-employed, you can deduct your office.

Many expenses that are directly related to your content creation and promotion can be deducted from your taxable income. From advertising fees to website hosting, there are a slew of tax write-offs that can help lower your tax bill. All of the deductions below will be reported on Schedule C (Form 1040) when you file.

As a startup, operating as a sole proprietor might suffice. However, once you begin generating substantial revenue, collaborating with brands, or considering team expansion, creating an LLC could be beneficial for taxation purposes, legal protection, and ownership flexibility.

It's common for brands to send influencers a free product to try and promote. If the product is worth more than $100, influencers have to pay taxes on it. If it's worth less than $100, taxes aren't levied against it. To be safe, influencers should keep a detailed list of all products given to them throughout the year.

THE REMOTE-WORK TAX RULE

The rule is, if a nonresident receives W-2 wages for work performed out of state, even if it's from a California employer, the income is not subject to California income taxes.

If you commute to Oregon for work, you owe income tax in the state even if you live in Washington. If you work remotely for an Oregon company, however, you don't have to pay the extra income tax.

As a nonresident, you pay tax on your taxable income from California sources. Sourced income includes, but is not limited to: Services performed in California.