I truly hope your weekend wasn’t spent anticipating a weather report from a certain notorious rodent. Because Punxsutawney Phil hasn’t had the most reliable track record in the past – 70 percent of his predictions have been wrong in recent years.
You know how the old saying goes: never trust a rodent to do a meteorologist’s job. Or something like that.
On a more serious note about something else that happened over the weekend – Trump announced that his promised additional tariffs on imports will go into effect February 4th, setting 25 percent additional tariffs on goods from Mexico and Canada, and 10 percent additional on goods from China.
And for you, unfortunately, that means prices are likely about to go up on your daily needs, like gas and food.
It’s easy to feel frustration and helplessness in this kind of moment (among other feelings). You’ve been seeing prices consistently going up over the past few years and feeling its effects on trips to your favorite Harris County grocery store. While we are all in a wait-and-see pattern with what’s happening at the presidential level, the one thing I can speak to right now is being intentional with your taxes.
Waiting until tax filing time and focusing only on compliance isn’t doing you any favors. In fact, this cycle could be siphoning more from your bank account than may be necessary. Paying taxes may be your obligation as an American, but there are positive financial moves you can make to position yourself better and even reduce what you owe.
With all that’s happening right now, making those moves can feel like a one-step-forward, two-steps-back kind of rhythm. But ultimately, that’s all you can control – taking that one step forward at every opportunity you get. I’m here to help you do that at your tax filing appointment (which you’ll want to get secured on my calendar as soon as you can): calendly.com/postalplustax
Now, that’s not to say being tax-savvy doesn’t have a legal compliance element as well. This is the part that can get very messy, depending on your individual circumstances.
Right now, even though there’s a migration back to the office happening (mostly spearheaded by big companies and the government), about 32 million people still work remotely. If you happen to be one of them, I want to help give you some tax clarity today.
Work From Your Harris County home? What You Need To Know
“When one door of happiness closes, another opens, but often we look so long at the closed door that we do not see the one that has been opened for us.” – Helen Keller
Working in an office is feeling more like a fossilized concept post 2020 – which, strangely, makes me sentimental. Think of how many Jim Halperts might never meet their Pam Beeslys.
Having some kind of work-from-home configuration in your schedule can be very convenient… until it comes to your taxes.
And if the company you work remotely for is in another state, you get the delight of dealing with state taxes twice over (and tracking the changes that happen with them). But before you get 37 browser tabs deep into tax legislation research, let me save you the effort and sum up what you need to know to stay compliant.
What’s new with remote work and your taxes?
Some state tax rates changed at the start of 2025 and that can affect your tax filing (which, might I remind you, is coming up fast). I serve clients from all over, not just in the Houston area. So if you’re one of those living in another state, here are the most recent updates:
- Missouri has restructured its income tax brackets and added a new 4.3 percent bracket for taxpayers earning between 16.5K and 33.5K individually or between 25K and 50K jointly.
- Nebraska reduced its top marginal income tax rate from 5.8 percent to 5.2 percent.
- Iowa is transitioning to a flat income tax system, with a new rate of 3.8 percent that became effective as of January 1 of this year.
- Louisiana has also implemented a flat income tax rate of 3 percent (as well as a 12.5K standard deduction), replacing its previous graduated system.
- Mississippi reduced its top income tax rate from 4.7 percent to 4.4 percent.
- New Mexico has restructured its income tax brackets to lower taxes for all taxpayers in the state, and a new 6th bracket will be added for filers in the low-level income ranges.
- North Carolina reduced its flat income tax rate from 4.5 percent to 4.25 percent.
- West Virginia lowered its top marginal income tax rate from 5.1 to 4.8 percent.
- Hawaii has widened its income tax brackets (but if you’re working remotely for a company in Hawaii, I sincerely hope you get to work in person one day!).
- South Carolina made the temporary reduction of the top marginal income tax rate (from 7 to 6.2 percent) permanent.
The recent trend for employers has been the implementation of the “convenience of the employer” rule. Put simply: If you work from home because you want to (when you “could” be working from the office) then your employer’s state gets the say on your remote work taxes. (Though there are reciprocal agreements that can affect how this rule applies, and you might be able to claim a tax credit in your state of residence to avoid double taxation.)
Currently, Connecticut, Delaware, Nebraska, New York, and Pennsylvania enforce this rule, with New Jersey adopting it as of Jan 1. Something to note if you’re living in one of these states.
Doing your part with your remote work taxes
State-to-state tax issues can get messy quickly. And if you underpay because your employer didn’t withhold the right amount, the IRS can (and likely will) impose penalties. My advice is…
1. Look up your (and your employer’s) state’s tax rules. Check if your employer uses the “convenience of the employer” rule and how each state taxes remote income. Each situation is different.
2. Update your W-4. Check that your W-4 is accurate to those rules before you file your taxes to be safe.
3. Check your pay stubs. Make sure the withholding reported there reflects the correct state.
4. Track your locations. If you do a hybrid in-person-remote-work situation, you need records of when you work at each location, so you have justification for how much you’re taxed. And keep your employer in the know so they can withhold your remote work taxes correctly.
5. File correctly. You’ll likely need to file a non-resident return in your employer’s state (if your state requires it) and a resident return in your state, where you can claim the credits for those out-of-state taxes.
6. Make up the difference. If your employer’s withholding doesn’t cover all your tax liabilities (like in a dual-taxation situation), you may need to make up the difference with quarterly estimated payments.
Tax season is happening right now. This is the time to get these details sorted out – when mistakes (accidental or intentional) can bring the IRS to your door. With something like this, I would advise you not to try mustering through on your own. The possibility for oversight is too great. Let my team and I help you get this sorted out:
calendly.com/postalplustax
Keeping you remote-tax savvy,
Dominic Nguyen