Tax Question?

bigdog · 03-14-2011, 09:42 PM

Hi.....

Just completed my first year as a N.H. Resident. Yippee !

I realize as a N.H. resident, I do not have to pay any type of income tax from employment, but do I have to file any type of N.H. tax form, like I did in Mass. ?

Hey, I'm still a newbie here, and don't know all the State laws.

Thanks,
BD

wifi · 03-15-2011, 02:32 AM

There is a interest and dividends tax, if you are lucky enough to have this sort of income. You can google around for more info, as I'm no tax pro.

joey2665 · 03-15-2011, 05:04 AM

There is a 5% tax on interest and divindends. An individual whose interest and dividends total 2400 or married totaling 4800 must file NH Form DP-10. Your prtfolio gains and losses are also reported on the form but there is no tax consequence.

This tax also applies to and LLC, partnership or sole proprietors whose interst and dividends total 2400 or more.

The tax return is due April 15th on every year. It should be noted that there is a 1200 exemption for individuals over the age of 65.

www.NH.gov is has excellent source for questions regarding this tax as there are other items that must be reported such as distributions from an S-Corp.

By the way, yes I am a CPA.

Shreddy · 03-15-2011, 05:11 AM

As wifi stated, you have to be lucky enough to have the income to file a NH I&D return. Each individual is given a deduction (similar to the standard deduction on a federal return) of $2,400 for single or $4,800 if MFJ. If you are over the age of 65 or blind, you (and your spouse, if qualifying) receive and additional exemption of $1,200. The NH I&D tax is 5%. Also, certain interest and dividend income may be non-taxable to NH (such as dividend income earned on NH muni bonds).

Example:

If I'm married and under the age of 65, I need to have greater than $4,800 of federal interest, dividends, and tax-exempt income to meet the criteria to file. If I had $6,000 in interest and dividend income on my federal tax return, only $1,200 ($6,000 - $4,800) of it is taxable to NH at 5% equaling a tax of $60.

Hope that helps

Slickcraft · 03-15-2011, 06:06 AM

I think that part of BD's question was: does he have to file a form even if no tax is due. The answer to that is no. The state wants a form filed only if you owe I&D tax because you exceeded the limits already noted.

joey2665 · 03-15-2011, 06:42 AM

Quote:

Originally Posted by Slickcraft

I think that part of BD's question was: does he have to file a form even if no tax is due. The answer to that is no. The state wants a form filed only if you owe I&D tax because you exceeded the limits already noted.

I beleive I answered that question in that if you have 2400 single or 4800 married you must file. Obviously if you do not attain these amounts you do not file the DP-10

MarkinNH · 03-15-2011, 06:57 AM

If you are self employed and have a gross income of $50k or more you are required to file the appropriate paperwork with the state of NH. You may not owe any tax but you are still required to file.
I know that for a fact for I have had to do it for many years.
Everybodys individual situation vary's and if you Really want to know what is or isn't required of you legally you should be talking to a qualified accountant and not asking advice from strangers on a forum.
No insult to anybody who has replied but none of us know his exact situation. If he has questions and concerns he needs professional advice.

Shreddy · 03-15-2011, 07:02 AM

Quote:

Originally Posted by MarkinNH

If you are self employed and have a gross income of $50k or more you are required to file the appropriate paperwork with the state of NH. You may not owe any tax but you are still required to file.
I know that for a fact for I have had to do it for many years.
Everybodys individual situation vary's and if you Really want to know what is or isn't required of you legally you should be talking to a qualified accountant and not asking advice from strangers on a forum.
No insult to anybody who has replied but none of us know his exact situation. If he has questions and concerns he needs professional advice.

As an individual he would only be subject to NH I&D tax unless he had a Schedule C business (as you've referred to above I believe) that has exceeded filing thresholds. Then yes, there are other NH taxes such as Business Enterprise Tax and Business Profits Tax. I don't believe he is inferring that he has a business to file with his individual return, however I may be wrong.

bigdog · 03-15-2011, 04:31 PM

Thanks folks for all the valuable info., much apprecaited !

FYI, I'm not self-employed, so that settles that question, about reporting income

Also, I don't exceed the State allowance for I & D to report, mute issue there for sure!

Suprised the State of NH however doesn't go after the SUPER rich for some taxes, like Obama wanted to push ! Didn't he want to go after anyone making more than 100k, you know.... The SUPER rich ! Right!!!!!!!!!!!!!!!!!! If that's the SUPER rich, I definitely fall below that level.

BD

garysanfran · 03-15-2011, 06:36 PM

[QUOTE=bigdog;152689]Thanks folks for all the valuable info., much apprecaited !

FYI, I'm not self-employed, so that settles that question, about reporting income

Also, I don't exceed the State allowance for I & D to report, mute issue there for sure!

Suprised the State of NH however doesn't go after the SUPER rich for some taxes, like Obama wanted to push ! Didn't he want to go after anyone making more than 100k, you know.... The SUPER rich ! Right!!!!!!!!!!!!!!!!!! If that's the SUPER rich, I definitely fall below that level.

Why do liberals (assumption) always want to "go after" someone. Can't you just enjoy your new digs and leave others be? You're in a new land. Leave the old ways home.

DickR · 03-15-2011, 07:46 PM

What determines if someone has self-employment income that is subject to the business profits tax? If he has such income, doesn't he in effect have a "business?" And what constitutes the "profit" from that business on which he would owe a tax - does it include income he takes from the business as "salary?"

Shreddy · 03-16-2011, 05:39 AM

Quote:

Originally Posted by DickR

What determines if someone has self-employment income that is subject to the business profits tax? If he has such income, doesn't he in effect have a "business?" And what constitutes the "profit" from that business on which he would owe a tax - does it include income he takes from the business as "salary?"

If you have gross receipts of less than $50,000 you do not have to file a BPT return. The BPT rate is 8.5% of NH taxable income. If you end up paying Business Enterprise Tax (BET), you can use that as a credit against any BPT owed. Business Enterprise Tax is a .75% tax on the following expenses of a business; salaries and wages, interest paid, dividends and retirement contributions. You are not required to file a BET return if the sum of these expenses is less than $75,000.

If you are self employed, I'd assume you don't need to take a salary. You will get taxed as ordinary income on the net income that you make (Revenues - Expenses). Self employed individuals are subject to SE tax (federally) as they are essentially both the "employer" and "employee". The SE tax is in place as a self-employed individual does not have any withholdings (federal, SS, med). Regular, non self employed employees, receive a paycheck and these taxes are withheld on a regular basis.

tis · 03-16-2011, 06:27 AM

Quote:

Originally Posted by DickR

What determines if someone has self-employment income that is subject to the business profits tax? If he has such income, doesn't he in effect have a "business?" And what constitutes the "profit" from that business on which he would owe a tax - does it include income he takes from the business as "salary?"

The BPT is a tax on the PROFITS a business makes after expenses. The BET was instituted really to get professionsals (doctors, lawyers etc.) to pay a tax on their salary. An owner of a business pays BET on his/her salary, so they pay on profits AND their salary. BET is really like an income tax for those who work for themselves.

DickR · 03-16-2011, 08:23 AM

Quote:

Originally Posted by tis

The BPT is a tax on the PROFITS a business makes after expenses. The BET was instituted really to get professionsals (doctors, lawyers etc.) to pay a tax on their salary. An owner of a business pays BET on his/her salary, so they pay on profits AND their salary. BET is really like an income tax for those who work for themselves.

It seems then that in NH most of the self-employed pay a state income tax in the form of BPT, while those who work for someone else don't. A man's employer would deduct the expense of the income paid to the employee and pay BPT/BET on what's left. Is that right? That sounds like a disencentive to starting one's own business. I hope I have that wrong.

Since no filing is required for BPT if that income is less than 50 grand, I presume that is the "standard deduction" beyond which BPT is paid. Is that so?

tis · 03-16-2011, 09:08 AM

Quote:

Originally Posted by DickR

It seems then that in NH most of the self-employed pay a state income tax in the form of BPT, while those who work for someone else don't. A man's employer would deduct the expense of the income paid to the employee and pay BPT/BET on what's left. Is that right? That sounds like a disencentive to starting one's own business. I hope I have that wrong.

Since no filing is required for BPT if that income is less than 50 grand, I presume that is the "standard deduction" beyond which BPT is paid. Is that so?

That's right, in my mind it is really an income tax on employers while employees don't have one.

songkrai · 03-17-2011, 10:30 PM

All of those who work in a neighboring state do have to file and pay income taxes to the neighboring state.

This is all lost revenue for New Hampshire. How many people live in NH and pay income taxes in MA, VT, and ME is not easy to calculate. Nor is the amount of revenue lost by New Hampshire to those neighboring states.

neckdweller · 03-18-2011, 02:31 PM

Quote:

Originally Posted by songkrai

All of those who work in a neighboring state do have to file and pay income taxes to the neighboring state.

This is all lost revenue for New Hampshire. How many people live in NH and pay income taxes in MA, VT, and ME is not easy to calculate. Nor is the amount of revenue lost by New Hampshire to those neighboring states.

If NH ever set up an income tax, I'm pretty sure New Hampshire wouldn't be able to collect income tax if the income is from a neighboring state unless the NH tax was higher. For example, my MA income is taxed at (rounded) 5%. NH would be entitled to collect taxes on my income only if their tax rate is above that 5%. This is similar to how Massachusetts sets up their tax returns - you get a credit for any tax paid to the state where the income was earned.

Rattlesnake Guy · 03-18-2011, 05:57 PM

From the Tax Policy Center

Income tax is generally imposed by the state in which the income is earned. However, various states have entered into reciprocity agreements with one or more other states that allow income earned in another state to be taxed in the state of residence. For example, Maryland’s reciprocity agreement with the District of Columbia allows Maryland to tax income earned in the District by a Maryland resident. As of 2004, sixteen states had adopted reciprocity agreements; typically these are states with employment centers close to a state border and large flows in both directions.

I think Massachusetts would be foolish to enter such a reciprocity agreement with New Hampshire due to the lopsided balance of Mass earners to NH earners who cross the boarder each day. A simple view of the traffic in the morning says it all.

no-engine · 03-23-2011, 08:30 PM

I have not read all the posts on this thread.
HOWEVER, I CANNOT STRESS ENOUGH THAT A FORUM SUCH AS THIS IS NOT THE PLACE TO OBTAIN LEGAL, ACCOUNTING ADVICE.
ONE SHOULD SEEK PROFESSIONAL ADVICE IN A CONFIDENTIAL SETTING.

03-14-2011, 09:42 PM	#1
bigdog Senior Member Join Date: Apr 2006 Location: Central MA-Gilford Posts: 1,450 Thanks: 345 Thanked 122 Times in 97 Posts	Tax Question? Hi..... Just completed my first year as a N.H. Resident. Yippee ! I realize as a N.H. resident, I do not have to pay any type of income tax from employment, but do I have to file any type of N.H. tax form, like I did in Mass. ? Hey, I'm still a newbie here, and don't know all the State laws. Thanks, BD

03-15-2011, 05:04 AM	#3
joey2665 Senior Member Join Date: Sep 2008 Location: Meredith Bay & LI, NY Posts: 3,222 Thanks: 1,219 Thanked 1,009 Times in 649 Posts	Answer There is a 5% tax on interest and divindends. An individual whose interest and dividends total 2400 or married totaling 4800 must file NH Form DP-10. Your prtfolio gains and losses are also reported on the form but there is no tax consequence. This tax also applies to and LLC, partnership or sole proprietors whose interst and dividends total 2400 or more. The tax return is due April 15th on every year. It should be noted that there is a 1200 exemption for individuals over the age of 65. www.NH.gov is has excellent source for questions regarding this tax as there are other items that must be reported such as distributions from an S-Corp. By the way, yes I am a CPA.

03-15-2011, 05:11 AM	#4
Shreddy Senior Member Join Date: May 2009 Location: Moultonboro Posts: 510 Thanks: 178 Thanked 219 Times in 115 Posts	As wifi stated, you have to be lucky enough to have the income to file a NH I&D return. Each individual is given a deduction (similar to the standard deduction on a federal return) of $2,400 for single or $4,800 if MFJ. If you are over the age of 65 or blind, you (and your spouse, if qualifying) receive and additional exemption of $1,200. The NH I&D tax is 5%. Also, certain interest and dividend income may be non-taxable to NH (such as dividend income earned on NH muni bonds). Example: If I'm married and under the age of 65, I need to have greater than $4,800 of federal interest, dividends, and tax-exempt income to meet the criteria to file. If I had $6,000 in interest and dividend income on my federal tax return, only $1,200 ($6,000 - $4,800) of it is taxable to NH at 5% equaling a tax of $60. Hope that helps __________________

03-15-2011, 04:31 PM	#9
bigdog Senior Member Join Date: Apr 2006 Location: Central MA-Gilford Posts: 1,450 Thanks: 345 Thanked 122 Times in 97 Posts	Tax Question? Thanks folks for all the valuable info., much apprecaited ! FYI, I'm not self-employed, so that settles that question, about reporting income Also, I don't exceed the State allowance for I & D to report, mute issue there for sure! Suprised the State of NH however doesn't go after the SUPER rich for some taxes, like Obama wanted to push ! Didn't he want to go after anyone making more than 100k, you know.... The SUPER rich ! Right!!!!!!!!!!!!!!!!!! If that's the SUPER rich, I definitely fall below that level. BD

03-15-2011, 06:36 PM	#10
garysanfran Senior Member Join Date: Jul 2009 Location: San Francisco/Meredith Posts: 1,574 Thanks: 668 Thanked 682 Times in 348 Posts	Question [QUOTE=bigdog;152689]Thanks folks for all the valuable info., much apprecaited ! FYI, I'm not self-employed, so that settles that question, about reporting income Also, I don't exceed the State allowance for I & D to report, mute issue there for sure! Suprised the State of NH however doesn't go after the SUPER rich for some taxes, like Obama wanted to push ! Didn't he want to go after anyone making more than 100k, you know.... The SUPER rich ! Right!!!!!!!!!!!!!!!!!! If that's the SUPER rich, I definitely fall below that level. Why do liberals (assumption) always want to "go after" someone. Can't you just enjoy your new digs and leave others be? You're in a new land. Leave the old ways home. __________________ Gary ~~~~_/) ~~~ ~~~~~~~~

03-15-2011, 02:32 AM	#2
wifi Senior Member Join Date: Jul 2007 Location: Lakes Region Posts: 1,321 Thanks: 282 Thanked 287 Times in 169 Posts	There is a interest and dividends tax, if you are lucky enough to have this sort of income. You can google around for more info, as I'm no tax pro.

03-15-2011, 06:06 AM	#5
Slickcraft Senior Member Join Date: Mar 2008 Location: Welch Island and The Taylor Community Posts: 3,310 Thanks: 1,227 Thanked 2,098 Times in 957 Posts	I think that part of BD's question was: does he have to file a form even if no tax is due. The answer to that is no. The state wants a form filed only if you owe I&D tax because you exceeded the limits already noted.

03-15-2011, 06:57 AM	#7
MarkinNH Senior Member Join Date: Mar 2010 Posts: 392 Thanks: 177 Thanked 146 Times in 76 Posts	If you are self employed and have a gross income of $50k or more you are required to file the appropriate paperwork with the state of NH. You may not owe any tax but you are still required to file. I know that for a fact for I have had to do it for many years. Everybodys individual situation vary's and if you Really want to know what is or isn't required of you legally you should be talking to a qualified accountant and not asking advice from strangers on a forum. No insult to anybody who has replied but none of us know his exact situation. If he has questions and concerns he needs professional advice.

03-15-2011, 07:46 PM	#11
DickR Senior Member Join Date: Apr 2008 Location: Moultonborough Posts: 751 Thanks: 4 Thanked 259 Times in 171 Posts	What determines if someone has self-employment income that is subject to the business profits tax? If he has such income, doesn't he in effect have a "business?" And what constitutes the "profit" from that business on which he would owe a tax - does it include income he takes from the business as "salary?"

03-17-2011, 10:30 PM	#16
songkrai Senior Member Join Date: Dec 2009 Posts: 733 Thanks: 35 Thanked 147 Times in 99 Posts	All of those who work in a neighboring state do have to file and pay income taxes to the neighboring state. This is all lost revenue for New Hampshire. How many people live in NH and pay income taxes in MA, VT, and ME is not easy to calculate. Nor is the amount of revenue lost by New Hampshire to those neighboring states.

03-18-2011, 05:57 PM	#18
Rattlesnake Guy Senior Member Join Date: Sep 2004 Posts: 1,254 Thanks: 423 Thanked 366 Times in 175 Posts	No free lunch From the Tax Policy Center Income tax is generally imposed by the state in which the income is earned. However, various states have entered into reciprocity agreements with one or more other states that allow income earned in another state to be taxed in the state of residence. For example, Maryland’s reciprocity agreement with the District of Columbia allows Maryland to tax income earned in the District by a Maryland resident. As of 2004, sixteen states had adopted reciprocity agreements; typically these are states with employment centers close to a state border and large flows in both directions. I think Massachusetts would be foolish to enter such a reciprocity agreement with New Hampshire due to the lopsided balance of Mass earners to NH earners who cross the boarder each day. A simple view of the traffic in the morning says it all.

03-23-2011, 08:30 PM	#19
no-engine Senior Member Join Date: Jul 2008 Location: West side Winnipesaukee, Lakes Region Posts: 516 Thanks: 20 Thanked 52 Times in 40 Posts	I have not read all the posts on this thread. HOWEVER, I CANNOT STRESS ENOUGH THAT A FORUM SUCH AS THIS IS NOT THE PLACE TO OBTAIN LEGAL, ACCOUNTING ADVICE. ONE SHOULD SEEK PROFESSIONAL ADVICE IN A CONFIDENTIAL SETTING.

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