mrichman333 Posted April 5, 2013 Report Share Posted April 5, 2013 So I have a Sch C customer from NJ with sch C gross of $41,943 of which $3,468 was a PA 1099MISC Net income is $29,4449 PA tax is $898???? That seem rather high. Any thoughts? Thanks Quote Link to comment Share on other sites More sharing options...
komtax Posted April 5, 2013 Report Share Posted April 5, 2013 first did you calculate the pa credit for taxes paid to other locality? Quote Link to comment Share on other sites More sharing options...
SFA Posted April 5, 2013 Report Share Posted April 5, 2013 PA is a flat tax of 3.07% of profit. Take your 1099misc from PA, allocate appropriate expenses, multiply by 3.07% Quote Link to comment Share on other sites More sharing options...
rfassett Posted April 5, 2013 Report Share Posted April 5, 2013 SFA is correct. You are calculating the PA tax on the total profit. Tax credits or income allocation is in order. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 5, 2013 Report Share Posted April 5, 2013 Or use PA Sch NRH, page 2 to allow the program to calc the net profit attributable to PA. I'm coming up with a tax of $75 based on your senario. PA % of gross receipts of total is 8.26% X net profit of $29449 would give a PA taxable profit of $2432 X PA rate of 3.07% = $75. If ATX is like it was in prior years, it won't like if there's no employer name in PA on page 1 of the NRH. Quote Link to comment Share on other sites More sharing options...
SFA Posted April 5, 2013 Report Share Posted April 5, 2013 ooops. PA and NJ are reciprocal states. I don't believe your client should pay any PA tax. Quote Link to comment Share on other sites More sharing options...
rfassett Posted April 5, 2013 Report Share Posted April 5, 2013 ooops. PA and NJ are reciprocal states. I don't believe your client should pay any PA tax. Correct me if I am wrong because I know more about the west border than the east and I do not have time to look, but Ohio and PA reciprocity applies only to employee compensation. Might not be the same with NJ. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 5, 2013 Report Share Posted April 5, 2013 I think the client still owes PA. The reciprocity agreements are for employees living in one state and working in the other. At least for a PA resident with SE income from NJ, the PA resident must file a nonresident return and report the income. I'd be surprised if it isn't the same for an NJ resident with SE income from PA sources. Quote Link to comment Share on other sites More sharing options...
mrichman333 Posted April 5, 2013 Author Report Share Posted April 5, 2013 Thanks Everyone! So I adjusted the income/expenses accordingly and came up with a $75 tax and a $75 tax forgiveness. Why the program didn’t allocate correctly is beyond me and it’s to late in the season to try and figure it out. I live close to NY so I don't do to many PA returns; they are reciprocal states but I think it is only on W-2 income. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.