Tax Rules for Out-of-State Workers
Many states have existing reciprocity agreements with their neighboring states, allowing workers, particularly those who live close to the state borders, to work in one state but pay income taxes in their state of residence. In recent years, however, as states are looking under rocks for more revenue, some of these reciprocity rules have been rescinded. But that's a different story. The Mobile Workforce State Tax Simplification Act of 2011 (we expect the year will change to 2012 if this ever becomes law) addresses the issue of workers who do a part-time gig in a state where they don't live.
Rather than have to file a tax return in each state where a worker logs some time, this legislation will allow employees to work in a state where they don't live for up to 30 days without owing income taxes to the state. The employee is not off the hook - he still must pay income tax on the income, but the tax liability would reside where the employee resides. However, athletes, entertainers, and politicians are not eligible to play by these rules. They are perceived to be earning enough money that the host states still want their cut.
Perry is a CPA and a former senior tax accountant with Big Four firm Deloitte. She maintains a small tax practice, she is a personal finance instructor, and the author of thirty books, including Surviving Financial Downsizing: A Practical Guide to Living Well on Less Income (Adams Media); QuickBooks on Demand (Que); Excel 2007 Macros Made Easy (McGraw Hill); The Complete Idiot's Guide to Doing Your Income Taxes (Alpha/MacMillan); and, most recently, Mint.com for Dummies (John Wiley & Sons). In addition, she is a former columnist for the Indianapolis Star and Indianapolis News daily newspapers.
Perry is a nationally recognized speaker who advises public accountants on using Internet tools to improve their accounting practices. She also taught a college-level introductory accounting class and was on staff at the Indiana CPA Society as a computer applications instructor. For five years, she was a contributing editor for Accounting Today magazine before taking over the helm at AccountingWEB.
Perry is a graduate of Indiana University where she earned a bachelor’s degree in journalism. She returned to school to study accounting at Illinois State University, passed the CPA exam (in one sitting!), and worked for Deloitte in the Chicago tax department.
Gail has been named one of the 25 Most Powerful Women in Accounting by CPA Practice Advisor magazine and the American Society of Women Accountants.