[SI-LIST] Re: Caution to those who live outside of California and got there on business!!! (Don't)
- From: William Baldwin <sio2man1@xxxxxxxxx>
- To: dmarc-noreply@xxxxxxxxxxxxx, "doug@xxxxxxxxxx" <doug@xxxxxxxxxx>, emc-pstc <emc-pstc@xxxxxxxx>, Si-List <si-list@xxxxxxxxxxxxx>
- Date: Tue, 02 Sep 2014 16:51:37 -0700
Damn you Dan, you beat me to it! - I mean comrade Dan.
On 9/2/2014 4:25 PM, Dan Bostan (Redacted sender dbostan@xxxxxxxxx for
DMARC) wrote:
> Welcome to the People's Republic of Kahliforniah...
> Just another reason to move to saner state.
>
> On Tuesday, September 2, 2014 2:40 PM, Doug Smith <doug@xxxxxxxxxx> wrote:
>
>
>
> Hi All,
>
> Just a note to those of you, especially consultants, but potentially
> anyone who visits California, even for a day, on business.
>
> CA has new rules that require companies there (they don't all know about
> it yet but will be in trouble after the first of the year if they don't)
> to withhold CA income tax from payments made to people from out of state
> if any of the work was done in CA.
>
> You need to fill out a tax form for every job/trip! It is "California
> Form 587, Nonresident Withholding Allocation Worksheet." In my case the
> client ignored the form and sent the maximum 7% of the gross proceeds in
> to CA.
>
> The company for whom you do work is required to deduct 7% from the gross
> payment to you, no allowance for expenses or, at least for the last job
> I did, the fact the job required 3 days in NV and two in CA. They took
> out 7% and sent it to the CA state government.
>
> The accounting for this is going to be tricky as you have to keep track
> and justify how much of the work was in CA and how much elsewhere. In
> the end, CA may extract up to 10% of your payment, 13% if you are really
> well off. I suspect the accounting and submitting tax forms will cost as
> much as the tax, or more.
>
> So starting now I am dividing my fee by 0.93 to cover the tax and
> probably need to at least double that to cover my time and the
> accountants time to keep track of all of this. I am thinking along the
> lines of $500/day additional to CA companies until I get a better idea
> of what this is going to cost.
>
> Although we don't have an income tax in NV they get it in other ways,
> such as $2000/year from me for a special rental car tax meant to hit
> tourists, as well as other taxes. I you come in from Massachusetts, for
> instance, you will be required to pay MA and CA income taxes! That plus
> Federal will be over 50% for most engineers (CA is 10% at $44,000 per
> year).
>
> I am interested to find out if I am the first person to run into this.
> If you go into CA for work purposes you will be hit for this. I plan to
> ask the CA tax people which precinct they are going to allow me to vote in.
>
> Doug
>
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