[QUOTE=“DeckApe;91460”]
If you live in CA that is where you pay taxes.[/QUOTE]
You can’t pick a residence out of a hat. The IRS can figure out where you live during an audit by going over such trivial details as electric bills, auto excise tax, mortgage interest deduction or medical bills ( for example). You may get away with it for a while… But during an audit the interest and penalty add up pretty quickly!
It is illegal for any company to withhold taxes for any seaman for any state except for the state of that persons residence. It is commonly referred to the Amtrak Act but has been ruled to apply to seamen as well. It is well established law and you should be able to find the USC by using Google or ask your CPA.
[QUOTE=tengineer;91520]It is illegal for any company to withhold taxes for any seaman for any state except for the state of that persons residence. It is commonly referred to the Amtrak Act but has been ruled to apply to seamen as well. It is well established law and you should be able to find the USC by using Google or ask your CPA.[/QUOTE]
Public Law 106–489
I found it rather quickly.
[QUOTE=cappy208;91461]You can’t pick a residence out of a hat. The IRS can figure out where you live during an audit by going over such trivial details as electric bills, auto excise tax, mortgage interest deduction or medical bills ( for example). You may get away with it for a while… But during an audit the interest and penalty add up pretty quickly![/QUOTE The IRS doesn’t really care what state you live in. State taxes are collected by state revenue department. IRS is a federal (unconstitutional) confiscatory agency.
Ok. You got me. I was referring to the State Tax agencies. Regardless. They are all smart enough to figure this out during an audit.
I read something recently that said MMP members on the Oregon dredges just won a case such as this. Apparently Oregon thought that because the ships work in Oregon waters that the mariners owed them taxes.
[QUOTE=Bloodyshitcakes;91615]I read something recently that said MMP members on the Oregon dredges just won a case such as this. Apparently Oregon thought that because the ships work in Oregon waters that the mariners owed them taxes.[/QUOTE]
The company that pays you is supposed to know the law and is not supposed to take out taxes except for your state of residence. If a state other than your residence state claims you owe them taxes simply because you worked there all you have to do is give them the code as was posted earlier. If that does not work you call the US Attorney in that state, give them the code and ask them to call the state officials in order to explain that their attempts to collect have no basis due to established code. Some state officials simply do not know this law, you have to educate them.
[QUOTE="tengineer;] Some state officials simply do not know this law, you have to educate them.[/QUOTE]
I would argue that the state agencies know the laws quite well. However, they play the ‘Send everyone a lien, a notice or a bill Game.’ Probably 50% of the recipients will simply ‘roll over’ and pay. Bingo, they just made some extra tax money…
[QUOTE=cappy208;91641]I would argue that the state agencies know the laws quite well. However, they play the ‘Send everyone a lien, a notice or a bill Game.’ Probably 50% of the recipients will simply ‘roll over’ and pay. Bingo, they just made some extra tax money…[/QUOTE]
In my experience the staff at the state tax collection agencies do not know about the federal statute in the first place. When they are shown the federal statute, they simply don’t care, and continue to demand that the state tax be paid. The state tax staff will just ignore you and the federal statute, until you get the issue documented in writing and into the hands of the tax agency’s lawyers.
[QUOTE=tugsailor;91661]In my experience the staff at the state tax collection agencies do not know about the federal statute in the first place. When they are shown the federal statute, they simply don’t care, and continue to demand that the state tax be paid. The state tax staff will just ignore you and the federal statute, until you get the issue documented in writing and into the hands of the tax agency’s lawyers.[/QUOTE]
A lot of the blame goes to companies for reporting that you work in a state in which you have no obligation to pay. Any knowledgeable company employing merchant mariners should know this law. You can have the company that reported this to write a letter to the state explaining that this was an error. However, you can always go to the US Attorney who should be able to clear this up with a phone call, if you get no cooperation from them you can contact your congressman. You can also threaten to sue the state in small claims court for adversely affecting your credit while violating the law. In the past I or my CPA have used all these tactics and it usually gets cleared up pretty quick.
Some of these posts sound like a gorilla beating it’s chest to announce how tough he is to the other males in the group (sorry, can’t help being a smartass). “Can’t”, “Illegal”, “The company should know”, “The IRS doesn’t care which state you live in” are all misnomers.
While some companies may help you out, it is not their responsibility to ensure your personal taxes are handled accurately and appropriately. That is, and remains, YOUR responsibility. If you live in Montana, but work offshore for a company based out of Louisiana, your employer COULD withhold taxes for the State of Montana on your behalf. The reality is you are probably their only employee residing in Montana and it’s a whole other set of paperwork that needs to be filed each pay period, quarter, and year. Multi-state payrolls are a pain in the ass, so the chances of them doing so are slim and none. While withholding for Louisiana would be inaccurate, many employers are concerned about running afoul of the law and taxing authorities that tell them they have to withhold taxes from you, so they do. That creates a headache for you, but isn’t likely to result in any actionable legal situation.
Pay attention to your pay stubs folks, particularly your first one with a new employer AND your first payroll of each year, that’s when mistakes are most likely to happen. Take care of it then, when the employer can adjust their numbers and make everything match before submitting your name on a quarterly report.
The IRS does care what state you live in, it affects your travel expense if you pay and claim such. All laws are subject to interpretation. While it may be perfectly clear to you or me, it can be evasive to the person making the decision. A co-worker recently lost an IRS Tax Court case. He and his wife live in a home they own in Missouri and he works on a barge, Port of New York, engaged in coastwise trade up and down the east coast. They determined that his state of residence was New York and disallowed all of his travel expenses for the previous 5 years (don’t fall for the 3 year audit crap, they do what they want, when they want).
Food for thought…
Good thread! I do live in MT and work in the GoM.
I’ve been sailing for 6 years and always paid taxes via estimated quarterly, in my home state of NY. I never bought in to all the deductions some guys use to cash in on huge refunds; meal deductions and travel that the company paid for, logs of arrival and departure times on coastwise trips to claim they were outside of any tax jurisdiction, etc, I have yet to find anything that says those are applicable deductions that entitle you to a 5 figure refund. Besides, my state’s tax law says it doesn’t matter where you were when you earned your income, as long as you’re a resident you gotta pay up; I suspect many states with income taxes are like that. Most people that use these schemes are just lucky and naive; far from the tax-savvy experts they claim to be.
Anyhow, my new company had an in-house form to elect to withhold state taxes, which I decided to do. Low and behold they didn’t withhold any state taxes and their response when I asked why, was that I was exempt, oh and not to worry because NY had been informed of this. Needless to say, I’m not about to let some foreign-based contracted payroll company decide what NY state taxes I owe since they wont be the ones writing check for back owed taxes and penalties next year. Anyone ever heard of this one?
It’s always good to talk to a tax expert on these matters- my dad was a boilermaker (Local #5, NYC) and worked the tri-state area even after we moved out of the area, so his tax situation changed yearly depending on what construction or shutdowns he worked. My mother kept excellent records of all his pay stubs. He worked for them all including Bechtel and helped build Indian Point nuclear plant.
I took a hint from that and now keep any and all receipts and pay stubs including anything I spend for work-unique items like training classes and steel toed shoes (if I buy them myself).
Heads up- as mentioned elsewhere, New York City is a mutha-you-know-what when it comes to taxes so if you work in or around the NYC area keep immaculate records. You could live in Timbuktu but if you do any trade in the Port of NY you could find yourself paying NYC wage tax etc etc.
[QUOTE=wafinator;98587]I’ve been sailing for 6 years and always paid taxes via estimated quarterly, in my home state of NY. I never bought in to all the deductions some guys use to cash in on huge refunds; meal deductions and travel that the company paid for, logs of arrival and departure times on coastwise trips to claim they were outside of any tax jurisdiction, etc, I have yet to find anything that says those are applicable deductions that entitle you to a 5 figure refund. Besides, my state’s tax law says it doesn’t matter where you were when you earned your income, as long as you’re a resident you gotta pay up; I suspect many states with income taxes are like that. Most people that use these schemes are just lucky and naive; far from the tax-savvy experts they claim to be.
Anyhow, my new company had an in-house form to elect to withhold state taxes, which I decided to do. Low and behold they didn’t withhold any state taxes and their response when I asked why, was that I was exempt, oh and not to worry because NY had been informed of this. Needless to say, I’m not about to let some foreign-based contracted payroll company decide what NY state taxes I owe since they wont be the ones writing check for back owed taxes and penalties next year. Anyone ever heard of this one?[/QUOTE]
Claiming meals will get you flagged. Just ask Martin Kapp customers. Coast wise may not be out of tax jurisdiction but there is a federal daily deduction that can be taken for everyday away from home. I believe there is a monetary difference between at sea and in port. There is a max allowance without any receipts. I know a lot of people try to do what they can to deduct everything, but there are legal deductions without fudging it
There are ways of claiming meals in certain situations, like if you worked on a dayboat and whatnot. If you get a per-diem allowance from your company it needs to be reflected in what you claim, but there are situations.
…but just claiming it with no adjustment is not going to work. Good luck!
You can write off the cost meals you pay for (away from home)or use the US state dept domestic per diem tables for the amount for which meal; breakfast, lunch, supper in the city where you ate it. If you use the latter you don’t need a reciept but it will help if you keep reciepts. A good way to keep your expenses separate is to have a credit or debit account just for travel meals and expenses. You can eat at a 5 star restaurant while away and write all of it off but the booze.
[QUOTE=“Too bad steam is gone;98607”]You can write off the cost meals you pay for (away from home)or use the US state dept domestic per diem tables for the amount for which meal; breakfast, lunch, supper in the city where you ate it. If you use the latter you don’t need a reciept but it will help if you keep reciepts. A good way to keep your expenses separate is to have a credit or debit account just for travel meals and expenses. You can eat at a 5 star restaurant while away and write all of it off but the booze.[/QUOTE]
What? You can’t write off the drinks? How’s that for being unfair.
My understanding is that if you actually get money from the company per man per day, you can do it like this:
me&i ($59 a day) less what you get from the company…say ($20)…you could claim the $39…if you aren’t going ashore though I would be leary of claiming it.
Your right… Last year meal allowance was $71 a day in NY. You minus what you get per day for grub ($18) which ends up being $53 a day for everyday you work. The meal allowance changes every year and is different in every region.