OT - Indian taxes

[DaddyChoc]

working on a reservation as a regular US citizen you receive a paycheck and a W2 (early in the new year) but of course no federal taxes come out.

must you file taxes?

is there any way to get taxes deducted from your weekly paycheck (payroll, accounting, human resources) so that you dont have this lump sum you must pay back to the IRS in April?

 

[Icebear]

Ask TonyC.

 

[DaddyChoc]

hopefully he see this thread, thanks

 

[Drumguy]

Usually you can request taxes to be withheld either based on withholding tables or on the W4 there is a place to have extra taxes withheld. It's more unusual for them not to withhold as most employees are subject to income tax. Employers will frequently withhold taxes for the convenience of employees - in ffld county a lot of employers withhold NY taxes for their employees that work in CT but reside in NY for example. If they do not accommodate you, you have 2 options. Complain to the state's department of labor and let them fight the fight or file quarterlies - due 4-15, m6-15, 9-15 and 1-15. Basically if you have to file quarterlies, you should find a good accountant who can help you project your income for the year and your tax.

Where are you located? Tony is in Stamford and usually works mostly during tax season and I'm a CPA in Westport.

 

[Icebear]

I think the question is how does the reservation and private nation status affect filings and process and what they do or don't have to do because of that status.

 

[Vowelguy]

Complain to the state's department of labor and let them fight the fight or file quarterlies -

State has no jurisdiction over sovereign nations/Indian tribes.

I'm surprised that they don't offer to do withholding to make it easier for their employees, but it would add some extra work/expense for them.

Income is income. You have to pay taxes on it.

 

[JS]

I think the question is how does the reservation and private nation status affect filings and process and what they do or don't have to do because of that status.

Working on a reservation creates no special tax status. Casino workers, for example, pay all federal and (at least in Connecticut) state taxes like anyone else.

That would include the regular withholding requirements, so I question DC's info that nothing is being withheld.

Not DC's question, but the tribe itself is indeed a sovereign nation in many respects. It and its operating subsidiaries are federally tax exempt. The tribe may, however, have a revenue sharing deal with the state.

 

[Vowelguy]

Working on a reservation creates no special tax status. Casino workers, for example, pay all federal and (at least in Connecticut) state taxes like anyone else.

Right, but I'm not sure that an entity on non-US land is required to do the withholding for you.
I worked one summer for the World Bank in DC, which also is non-US. They didn't withhold anything either, but I definitely had to pay taxes on it.

 

[JS]

Right, but I'm not sure that an entity on non-US land is required to do the withholding for you.
I worked one summer for the World Bank in DC, which also is non-US. They didn't withhold anything either, but I definitely had to pay taxes on it.

Native American tribes are required to withhold federal payroll taxes, including income, FICA, etc. like other employers. See discussion toward the end of this abstract.

State tax deals vary from state to state and can be complex. Generally, if the employee is a Native American living and working on the reservation, he isn't subject to state taxation.

 

[Icebear]

Native American tribes are required to withhold federal payroll taxes, including income, FICA, etc. like other employers. See discussion toward the end of this abstract.

State tax deals vary from state to state and can be complex. Generally, if the employee is a Native American living and working on the reservation, he isn't subject to state taxation.

This is what I was getting at JS. I was not sure how the issue of sovereignty impacted the requirements to do witholding for employees but was pretty sure the income would be as taxable as pay earned in Germany.

 

[DaddyChoc]

just wondering if they do it for you... or you're on your own to payback in April. maybe too much work for their payroll dept.

 

[JS]

just wondering if they do it for you... or you're on your own to payback in April. maybe too much work for their payroll dept.

They have to do it if you're an employee.

If you're an independent contractor (1099 instead of W-2) it's more as you describe. They won't withhold, but it's taxable, so you're on your own to file estimated taxes during the year or get stuck with possible penalties if you pay all at once in April.

 

[Drumguy]

They have to do it if you're an employee.

If you're an independent contractor (1099 instead of W-2) it's more as you describe. They won't withhold, but it's taxable, so you're on your own to file estimated taxes during the year or get stuck with possible penalties if you pay all at once in April.

Just checked back in on this post. JS is right on. Also, as a US citizen your global income is taxable in the US but there are different credits available if you live and work in a foreign country, Indian reservations don't count as a foreign country per se for the foreign service income exclusion iirc. Depending on DC's work status, if they aren't treating him as an employee, then essentially he's working as independent contractor as JS posted above and is responsible for all taxes, tax filings etc. If so, Dc should also consult with an accountant to take advantage of all the deductions and expenses that are available to him. Overall though if he thinks he's an employee, there's a significant disconnect going on and he should get that resolved asap.

 

[DaddyChoc]

thanks everyone