Tax question for you experts out their
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Senior Member
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From: Bristol, WI
Tax question for you experts out their
I recently moved to Wisconsin but I commute to Illinois everyday for work. I know I will pay non-resident rates for Illinois but will I also have to pay regular taxes for Wisconsin even though I don't make any money their? Let me finish by saying I just love taxes, yeah right! Thanks for the help.
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From: DeLand, FL
Re: Tax question for you experts out their
SVT-Snake
I'm not specifically familiar with Wisconsin and Illinois state law, although all the states tend to follow the same pattern. Given you know that you will have to pay NR Illini tax, the issue really is will you have to file a Wisconsin return as a resident and pay taxes.
Unfortunately, the answer is probably yes. States typically use a Catch 22 system, where a certain number of days in the state will make you a resident (or part-year resident in your case). In addition, once residency and domiciliary intent is established, it doesn't matter if you leave the state, you will be considered a resident as long as you intend is keep Wisconsin as your domicile (which is a facts and circumstances argument too involved to go into here).
The good news is that sometimes states that impose income taxes (I live in Florida, no individual income tax) allow deductions or even credits for taxes paid to another state. Also, keep in mind that moving expenses are an above-the-line deduction (unless reimbursed by the employer). Don't forget that on your 2002 return.
Sorry I can't be more help, being in Florida I work almost exclusively with Federal tax issues....
I'm not specifically familiar with Wisconsin and Illinois state law, although all the states tend to follow the same pattern. Given you know that you will have to pay NR Illini tax, the issue really is will you have to file a Wisconsin return as a resident and pay taxes.
Unfortunately, the answer is probably yes. States typically use a Catch 22 system, where a certain number of days in the state will make you a resident (or part-year resident in your case). In addition, once residency and domiciliary intent is established, it doesn't matter if you leave the state, you will be considered a resident as long as you intend is keep Wisconsin as your domicile (which is a facts and circumstances argument too involved to go into here).
The good news is that sometimes states that impose income taxes (I live in Florida, no individual income tax) allow deductions or even credits for taxes paid to another state. Also, keep in mind that moving expenses are an above-the-line deduction (unless reimbursed by the employer). Don't forget that on your 2002 return.
Sorry I can't be more help, being in Florida I work almost exclusively with Federal tax issues....
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Joined: Jun 2001
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From: DeLand, FL
Re: Tax question for you experts out their
SVT-Snake
Today's your lucky day, I decided to review Illini and Wisconsin Code and Regulations.
FYI - Wisconsin uses strict domicilary intent to determine residency exclusive of days in the state.
Pursuant to Ill. Admin. Code 100.3120, no tax is to be withheld and no apportionment of income is to be made to Illini on the wages of a resident of a state with which Illini has entered into a reciprocal agreement with. Illinois, Indiana, Kentucky, Michigan, and Minnesota have entered into such reciprocal agreement with one another.
In a nutshell, the wages you earn in Illinois are NOT subject to Illinois income tax. You will only pay Wisconsin tax as a resident of Wisconsin. In the event taxes are withheld by Illinois on your wages, you will simply have to file an Illinois return to obtain a refund....Hope this is good news for you...
Today's your lucky day, I decided to review Illini and Wisconsin Code and Regulations.
FYI - Wisconsin uses strict domicilary intent to determine residency exclusive of days in the state.
Pursuant to Ill. Admin. Code 100.3120, no tax is to be withheld and no apportionment of income is to be made to Illini on the wages of a resident of a state with which Illini has entered into a reciprocal agreement with. Illinois, Indiana, Kentucky, Michigan, and Minnesota have entered into such reciprocal agreement with one another.
In a nutshell, the wages you earn in Illinois are NOT subject to Illinois income tax. You will only pay Wisconsin tax as a resident of Wisconsin. In the event taxes are withheld by Illinois on your wages, you will simply have to file an Illinois return to obtain a refund....Hope this is good news for you...
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Joined: Jun 2001
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From: DeLand, FL
seacrow
Ain't it though? Northern cities are having a very difficult time retaining residents and employees. Not only is the "concept" of living in Chicago, NY, etc. that of "dangerous, cold, and dull", but these States and cities, sometimes counties and buroughs, tax the bejesus out of their residents.
Clearly, taxation and government are both growing beasts that can almost never be restrained once Pandora's box is opened. Realize we do many of the things here in Florida that other States do system wise, but do so mainly through the collection of a sales and use tax and an intangibles tax, as well as other miscellaneous taxes and a corporate net income and excise tax. Both Texas and Florida have the right idea not taxing individuals, and that is why the growth in both States is PHENOM! I'm sure you've been keeping up with the sky-rocketing boom in Florida real estate, and as someone who owns real estate, I'm sure you are a part of the action itself...
Of course, the clock is running against us...Every once in awhile some wayout left liberal in the Legislature puts a bill on the floor calling for individual income taxation, eventually it will get passed (the potential revenue is too great). Too bad other States can't hold Florida up as an example (other than for election tallying purposes). Instead, we'll get taken down into the gutter with them...
Should just go to show you that the Federal tax system was once primarily an excise tax system (prior to WWII), and it worked GREAT!...Imagine no federal income tax! Somehow the governmental still fulfilled its duty back before we were taxed - i.e. through budget controls and careful spending...
Ain't it though? Northern cities are having a very difficult time retaining residents and employees. Not only is the "concept" of living in Chicago, NY, etc. that of "dangerous, cold, and dull", but these States and cities, sometimes counties and buroughs, tax the bejesus out of their residents.
Clearly, taxation and government are both growing beasts that can almost never be restrained once Pandora's box is opened. Realize we do many of the things here in Florida that other States do system wise, but do so mainly through the collection of a sales and use tax and an intangibles tax, as well as other miscellaneous taxes and a corporate net income and excise tax. Both Texas and Florida have the right idea not taxing individuals, and that is why the growth in both States is PHENOM! I'm sure you've been keeping up with the sky-rocketing boom in Florida real estate, and as someone who owns real estate, I'm sure you are a part of the action itself...
Of course, the clock is running against us...Every once in awhile some wayout left liberal in the Legislature puts a bill on the floor calling for individual income taxation, eventually it will get passed (the potential revenue is too great). Too bad other States can't hold Florida up as an example (other than for election tallying purposes). Instead, we'll get taken down into the gutter with them...
Should just go to show you that the Federal tax system was once primarily an excise tax system (prior to WWII), and it worked GREAT!...Imagine no federal income tax! Somehow the governmental still fulfilled its duty back before we were taxed - i.e. through budget controls and careful spending...
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Senior Member
Joined: May 2000
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From: Bristol, WI
WOW
cpadpl,
I don't know where to start. I was just hoping someone knew a general rule about living in one state and working in another but you went far and above that and found out exacts on the 2 states. I want to thank you very much. Now the only problem is I would rather pay the Illinois rate which is 3% across the board instead of Wisconsin's which is 6.5%!!! I would have never imagined that WI would have higher taxes than IL but I guess with taxes it's anybody's guess! Thanks again for the help!
I don't know where to start. I was just hoping someone knew a general rule about living in one state and working in another but you went far and above that and found out exacts on the 2 states. I want to thank you very much. Now the only problem is I would rather pay the Illinois rate which is 3% across the board instead of Wisconsin's which is 6.5%!!! I would have never imagined that WI would have higher taxes than IL but I guess with taxes it's anybody's guess! Thanks again for the help!
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Joined: Mar 2000
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From: Gold River, CA
SVT-Snake,
I don't live in either state, but I think I can help you.
The simple answer is here:
http://www.dor.state.wi.us/forms/2001/01i-150.pdf
See the first “note” for the instructions for line 61 on page 26.
It appears that Illinois does not tax the income of Wisconsin residents.
BUT, with taxes, nothing is simple. If you were a resident of Illinois before you moved to Wisconsin, then you have another problem. As above, you will have to file a Wisconsin part-year resident return for 2002.
http://www.dor.state.wi.us/forms/2001/01i-050.pdf
If you live in Wisconsin all of next year, you will, of course, file their resident return.
In this situation, line 61 is where you need to take a credit for your taxes paid to Illinois for the income earned in Illinois while an Illinois resident.
This is only half the answer, maybe less. I did not review the part-year return for Illinois, but it probably is very similar to Wisconsin.
If you have any problems completing the forms next spring, I will probably still be on this board and I will be glad to help you.
Sorry, this is so long and rambling, or that it is not a little more complete and organized, but I've got to get back to work!
BOB
I don't live in either state, but I think I can help you.
The simple answer is here:
http://www.dor.state.wi.us/forms/2001/01i-150.pdf
See the first “note” for the instructions for line 61 on page 26.
It appears that Illinois does not tax the income of Wisconsin residents.
BUT, with taxes, nothing is simple. If you were a resident of Illinois before you moved to Wisconsin, then you have another problem. As above, you will have to file a Wisconsin part-year resident return for 2002.
http://www.dor.state.wi.us/forms/2001/01i-050.pdf
If you live in Wisconsin all of next year, you will, of course, file their resident return.
In this situation, line 61 is where you need to take a credit for your taxes paid to Illinois for the income earned in Illinois while an Illinois resident.
This is only half the answer, maybe less. I did not review the part-year return for Illinois, but it probably is very similar to Wisconsin.
If you have any problems completing the forms next spring, I will probably still be on this board and I will be glad to help you.
Sorry, this is so long and rambling, or that it is not a little more complete and organized, but I've got to get back to work!
BOB