Tax Question

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Parks 788

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Seem to be full of questions recently.

So, wife and I will be filing our first full year 2022 taxes this year in OK. Last year it was split between CA and OK. Met with a CPA/Tax guy that my inlaws have used for years. THe guy was nice and seemed like he "knew what he was doing" but then we had a question about some write-offs. Here's the deal.

Wife works 3 weeks a month in OK from home. Then travels to CA to meet her clients and work for/at the CA office one week each month. THe agreement she has with the owner of her company was that she would keep her CA salary but she would pay for her own travel/flight costs and car rental while in CA. This equates to about $12K in travel expenses per year. I asked the CPA about these expenses as write-offs and he said these types of work related expenses are no longer allowed and can't be used.

For those of you smarter than I, is this accurate? I was shocked when he mention this and thought this info was BS. THese are legit work expenses so not sure why they can't be written off. Seems crazy. What say you?
 

mtnboomr

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I would say the travel expenses and rentals would have to be taxed in California, and not Oklahoma. The reason the CPA said they're not allowed in Oklahoma may be due to laws in California.

Your wife may be forced to file in both states. But that's just speculation on my part.

I would ask another CPA to explain it.
 

dennishoddy

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I would say the travel expenses and rentals would have to be taxed in California, and not Oklahoma. The reason the CPA said they're not allowed in Oklahoma may be due to laws in California.

Your wife may be forced to file in both states. But that's just speculation on my part.

I would ask another CPA to explain it.
I think your right. I saw a news report as well as a first hand report from a friend that was a resident of New Mexico but had a consulting job in San Fran where he got double taxed by Ca.
Parks certainly needs to find someone with that tax experience.
 

TinkerTanker

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Employees can't deduct unreimbursed travel expenses anymore. If she were to go self employed (only 25.00 in Oklahoma) and have them 1099 her, she could deduct massive amounts of goodies, get paid a california wage, and take home more money. HOWEVER, you'd have the SE tax to contend with so you'd need to have her collect a "wage" of about 35k/year and then a draw of the rest.
If the deductions are pretty big, that's what I'd do. I'd also tell the employer that I'll have more expenses if I do this, so he needs to bump up my pay by 10%.

Now, I do not know anything about how the California communist "You don't live here but we tax you anyway" laws work so they might dip their finger in her pocket for a taste too. You'll have to talk to a CPA about that specifically. I do know that they track your cell phone and if you're in california after you say you moved, they'll tax you for the time you're back in town. Bastards.
 

dennishoddy

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Employees can't deduct unreimbursed travel expenses anymore. If she were to go self employed (only 25.00 in Oklahoma) and have them 1099 her, she could deduct massive amounts of goodies, get paid a california wage, and take home more money. HOWEVER, you'd have the SE tax to contend with so you'd need to have her collect a "wage" of about 35k/year and then a draw of the rest.
If the deductions are pretty big, that's what I'd do. I'd also tell the employer that I'll have more expenses if I do this, so he needs to bump up my pay by 10%.

Now, I do not know anything about how the California communist "You don't live here but we tax you anyway" laws work so they might dip their finger in her pocket for a taste too. You'll have to talk to a CPA about that specifically. I do know that they track your cell phone and if you're in california after you say you moved, they'll tax you for the time you're back in town. Bastards.
You said it better than I did. The tracking and double taxing is happening.
 

MilitantBEEMER

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As someone that has been in sales for 30 years, the changes to the tax code a few years back really hurt. I can no longer write off expenses such as mileage, meals, home office, etc. The mileage write off alone really hurt. There have been years where I have logged 60,000 miles while working. (Typical is 20-30K).
As stated above, If you are a 1099 employee the rules are different.
 

Dorkus

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TinkerTanker

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Just remember though, the standard deduction has increased dramatically. This is supposed to "be a wash" for these OOP expenses. Not sure if that worked out but that was the intent.
Generally, for most of the population, the standard deduction is higher than what they were claiming through itemized deductions. In some cases quite a bit higher. For drivers though, 1099 is the way to go if you can.
 

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