Thursday, July 21, 2011

Tax Question- Need to know what this means?

Living in Ohio, and filing Ohio city taxes is a fun process! Not really. The cities of Ohio always want whatever you owe them, so always file to be safe, even if you do not owe them anything. Some cities require you to file every year, even if you do not work. As far as your question goes, you can't claim a refund from cities you work in, you will always pay taxes where ever you work, and you won't get any of that back in most cases. Whatever city you are filing for may allow a credit for other city witholdings. What you need to know is, whether or not that city limits this credit. For example you work in Trenton, but live in Germantown, Germantowns tax rate is 1.25% but they only allow a .75% credit, meaning if you have withholding from Trenton, which is 1.5%, you are only allowed to use .75% of that withholding towards Germantown, since it is not directly withheld to Germantown. Ohio cities scare most other preparers in other states. If your city allows credits up to their tax rate then as long as all of your city withholding adds up to what your city tax is, you should not owe anything.

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