And we just discovered that there is yet another Pittsburgh tax we didn't know about, and maybe even a couple different taxes we may or may not owe.  I called Pittsburgh to cancel our estimated tax forms that they have continued to mail to us, even though we now live outside of Pittsburgh.  In the course of the conversation, he said that we would probably still have to pay the payroll expense tax.  I asked what that was, and he said, oh, that's the new tax that replaced the mercantile tax.  I said I hadn't heard of either of those before...He is sending me a registration form to sign up to pay more taxes.  The payroll expense tax looks very complicated to calculate.  As a sole-proprietor, you are only taxes on money that you take out of your business bank account, not counting business expenses, and not counting money earned outside of Pittsburgh.  So, any money that I earn working for a company whose office is in Pittsburgh, but I am working from home, doesn't count.  However, if I travel to their office, then that income does count.  So, we now need two categories in our accounting program for my customers who have offices/homes in Pittsburgh, where one is for when I am at the office, and one is when I am anywhere else.  I am not quite sure what to do about my servers, since they live in Pittsburgh, and any time I travel to Pittsburgh to work on the servers, I am never paid to do it, unless you count the monthly hosting costs, which then I guess I have to have 0.068% of the hosting costs taxed at 0.55%, thus costing us 9.4 cents in taxes, and hours of work to calculate that number (I estimated a worst case scenario to quickly calculate that 9 cents).

But, we would only be taxed on that if we actually withdrew the money, so it would be lower than that.  I don't know what happens if you leave the money in the bank account until you close the account, or the business closes, or you die or something - I guess you have to calculate the 0.55% of the Pittsburgh income at that time.  Seems like an entirely crazy way to calculate tax.

And I have no idea how to calculate the back taxes we owe - trying to figure out what money wasn't withdrawn, and when, seems like an impossible task.

My guess for why they do it this way is so that it isn't considered an "income" tax, but a "payroll" tax, which is obviously, completely different.

Lovely Pittsburgh.

Posted by Jon Daley on December 18, 2008, 11:33 am | Read 24918 times
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The thing that seems odd to me is that the RRC is limited by line 52, but the original economic stimulus was just based on the number of kids.

Posted by Jon Daley on February 14, 2009, 1:03 pm

Did I get that right: when you order something on, say, sovereigngracestore.com, you have to calculate the PA sales tax on that and go somewhere to pay it?

Posted by Stephan on February 15, 2009, 8:47 pm

Yes. And I tell Heather she's the only one who does it. Some states are passing laws that say the retailers have to do it. Which is making people mad because now they have to pay sales tax.

Posted by Jon Daley on February 15, 2009, 9:50 pm

Now that I understand how the recovery credit works, I wrote a script to calculate it for all of you, so you don't have to waste as much time as I did.

Jon's Recovery Rebate Calculator

Posted by jondaley on February 17, 2009, 1:46 pm
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