Author Topic: Ohio Tax - seems tricky...  (Read 4557 times)

FrugalHeights

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Ohio Tax - seems tricky...
« on: March 28, 2017, 11:49:56 AM »
Hello MMM-ers,

If you live in Ohio or lived in Ohio recently, would you be able to suggest the best way to figure out state taxes?
I realized that I do not know how to make sure that I filed ALL Ohio-related taxes.

Here is the problem:
1) I heard from multiple people in Cleveland (and its suburbs) that Ohio has 4 layers of taxation: state, local, regional, school. (Crazy, uh!)
2) On my W2 (part time resident of the state), I have 2 entries: State wages/tax (Boxes 16-17) and Local wages/tax (Boxes 18-20)
3) When I filed my taxes with Tax Slayer, I chose not to file Ohio tax because the software would not file all local taxes for me (for example, it refused to file SD-100 school district tax form) and because the software was asking me questions that I did not know answers to - I was afraid to put something incorrect.
4) I filed State tax using OhioTax.gov form IT 1040 online, for free.
HOWEVER, on the OhioTax.gov, it was not clear whether to report Box 17 only or Boxes 17+19. Also, the site did not allow me to file SD-100, I believe it should be mailed, or something.

My questions are:
1) With respect to W2 Boxes 18-20, what kind of tax is recorded? Does it include school district tax? On which tax form should I report the tax from Boxes 18-20?
2) In Box 20, I have "CLEVELA" - is it Cleveland? Is it Cleveland Heights? Did anyone have this on W2? What does it imply?
3) What is the totality of forms I need to file in the Ohio? I know that Form Ohio IT 1040 is for state tax, SD-100 is for School District. Any others?
4) What is the right way to figure out School District? I found only Ohio tool, entered my address, and got "Shaker Heights SD", number XXXX. But, when I fill out SD-100 form online, there is no Shaker Heights SD to choose from the drop down menu. Nor there is Cleveland or Clevela. Nor SD with the number XXXX.
5) Lastly, how would I figure out whether my School District is "Earned Income" or "Traditional" SD? I do not have kids, so I have no idea which one I am in.

THANK YOU VERY MUCH FOR ANY INSIGHT!! I am sure it should be simple enough, but so far it looks dismal....


NoStacheOhio

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Re: Ohio Tax - seems tricky...
« Reply #1 on: March 29, 2017, 07:21:32 AM »
Cleveland doesn't have regional AND local taxes, and I haven't seen a line item for school taxes working in the City of Cleveland or living in my suburb. Everything gets funneled through RITA, generally. Depending on where you live and work, you may have to pay additional RITA to compensate for inadequate withholding/partial credits. For example, my suburb doesn't give me credit for the full amount I pay to RITA working in Cleveland, so I have to make additional quarterly payments. I end up paying like an extra 0.5% than I would working where I live.

As far as I know, I've never used SD-100. I've filed taxes in Ohio for probably 15 years, both Cleveland area and Columbus area, as well as Ohio resident living full time in New York.

I can go back and check my return for this year when I get home.
« Last Edit: March 29, 2017, 07:23:23 AM by NoStacheOhio »

Heroes821

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Re: Ohio Tax - seems tricky...
« Reply #2 on: March 29, 2017, 07:28:17 AM »
I filed taxes in Ohio most of my taxable life and I never ran into separate anything for regional or local taxes or schools.

Most of those years were as active duty so I simply got 100% of what was paid in back from the state.  I have never heard of any of my friends or family (some in the Cleveland area) having to do anything special for state taxes.  That being said they all have employers that handle withholding.

NoStacheOhio

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Re: Ohio Tax - seems tricky...
« Reply #3 on: March 29, 2017, 09:12:24 AM »
Generally, schools are funded through property tax, so I've never really heard of a line item for income-based school tax.

Midwest

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Re: Ohio Tax - seems tricky...
« Reply #4 on: March 29, 2017, 09:17:37 AM »
https://thefinder.tax.ohio.gov/streamlinesalestaxweb/default_municipal.aspx

You have to file an ohio income tax return.  You may or may not need to file a city or school district return (it depends on where you live).  Put your address into the above, it will tell you what school district and city taxes you are subject to based on where you live.

Last point - If you work in a city and live in another, they withhold city income tax in the city you work.  You then file a city tax return where you live and receive a credit for all or part of the tax paid by the other municipality. 

Yes, the city and school district taxes are stupid

the_fella

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Re: Ohio Tax - seems tricky...
« Reply #5 on: March 29, 2017, 12:54:45 PM »
I've lived in Ohio my entire life, and have never heard of an SD-100. I always just filed my state taxes on the state's online portal. Though this year, my cousin, who is a CPA, handled my taxes for me because my situation was a bit more complicated this year.

Midwest

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Re: Ohio Tax - seems tricky...
« Reply #6 on: March 29, 2017, 01:03:22 PM »
I've lived in Ohio my entire life, and have never heard of an SD-100. I always just filed my state taxes on the state's online portal. Though this year, my cousin, who is a CPA, handled my taxes for me because my situation was a bit more complicated this year.

That's probably because you live in a school district without school district tax.  Some have it, some don't.

Cranky

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Re: Ohio Tax - seems tricky...
« Reply #7 on: March 29, 2017, 01:21:44 PM »
Yes, it depends on where you live in Ohio - I pay city income tax but not a school district income tax.

This was actually easier to figure out when I did a paper form with a booklet of instructions, because there was a page in the booklet that listed which places had school district income taxes and which didn't.

Midwest

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Re: Ohio Tax - seems tricky...
« Reply #8 on: March 29, 2017, 01:28:26 PM »
Yes, it depends on where you live in Ohio - I pay city income tax but not a school district income tax.

This was actually easier to figure out when I did a paper form with a booklet of instructions, because there was a page in the booklet that listed which places had school district income taxes and which didn't.

Check out the link provided.

FrugalHeights

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Re: Ohio Tax - seems tricky...
« Reply #9 on: March 29, 2017, 02:07:39 PM »
Hi All, Thank you so much for the input! I also called RITA, Municipalities, and a school district governing body.

Bottom line - I need to move to a tax-optimized location! :))

Here is my simplified summary for anyone starting in Ohio :)

Taxes that may apply:
1) State (form IT-1040, can be eFiled for free).
2) School District tax (form SD-100)
3) Local tax for your residence location (Filed through RITA website)
4) Local tax for your working location (Not filed, but can be withheld by the employer in W2 Box 19. Use this number when file via RITA)

How to figure out what to file:
1) State - everyone. Use W2 Box 16 & 17.
2) School District - go to Tax.Ohio.gov > The Finder > School District Income Tax > Lookup By Address > Enter your Address and see the Results.
IF results say 0.00% - DO NOT NEED TO PAY/FILE.
IF results say >0%, then need to file SD-100. To fill out SD-100, grab from Finder: School District name and School District number.
To figure out if you are in "Traditional" or "Earned income" school district, go to The Finder > School District Income Tax. See "Download Tax Rates and Geographic Information Systems (GIS) Boundary Data". Click on "County and School District". In this PDF, blue(*) entries are Earned Income, black entries are Traditional. This information is needed to fill out SD-100.
3) Residence tax: I called RITA to check what city/municipality I should be paying my taxes to.
Then, go to RITA https://www.ritaohio.com/. Set up individual account. Follow eFiling instructions. Pretty clear here. Can pay right away by card.

What to do with Residence vs Work location taxes?
If the locations are the same - great! RITA is enough.
If the locations are not the same, there are 2 options:
(a) ask employer to withhold taxes for an additional locality. If the employer agrees, then you get 2 W2 forms: one with Box19 for work location taxes, and the other with Box 19 for residence taxes. RITA eFiling can accommodate both.
(b) employer may not do it. Or you may not chose to go through the employer. Then, RITA estimates your taxes online and you can pay quarterly. Either way, someone has to pay your residing location income taxes.
Because you pay local taxes for your working location, you may be eligible for a tax credit for your residing location. In my case, 50% was credited. Some areas can give full, 100% credit. Some do not give any. RITA's eFiling system will guide through this.

What about SD?
SD may or may not be withheld from the paycheck. If withheld, then it appears on Box19 on an additional W2 form. If not withheld, then same as with local taxes - either ask employer to withhold, or pay online (cannot say for sure if you need to pay estimated tax quarterly because I am lucky not to pay SD tax).
Notice: one can have as many W2 forms as types of local taxes withheld.

Let me know if I am forgetting anything.

Hopefully this will help anyone new to Ohio.

 
 

Cranky

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Re: Ohio Tax - seems tricky...
« Reply #10 on: March 31, 2017, 02:16:06 PM »
Yes, it depends on where you live in Ohio - I pay city income tax but not a school district income tax.

This was actually easier to figure out when I did a paper form with a booklet of instructions, because there was a page in the booklet that listed which places had school district income taxes and which didn't.

Check out the link provided.

I already know where I live. LOL But it's a weird system. And it pisses me off every year, because while I actually don't mind paying income taxes, being a good citizen and all, my taxes are withheld by the city in which I work, but I file taxes in the city where I live, which is 3 blocks away. Although my city of residence fully credits me for what has been withheld by the city wherein I work, I don't get the difference back, and I don't get any services for my tax money, either. They don't even plow out the street I walk down to get to work!

StarBright

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Re: Ohio Tax - seems tricky...
« Reply #11 on: April 07, 2017, 07:16:22 AM »
This was our first year paying Ohio taxes and in addition to the levels of  income taxes (which we did know about) we were shocked that our city (municipal?) taxes were based on gross income. My husband has a ton of mandatory witholdings (per his state funded job) and health insurance still ain't cheap and we do our best to max retirement so our take home is less than half of our gross - so that tax bill was particularly shocking.

DH also paid municipal taxes to the town he worked in  - so I'm not even sure how that works? 5 layers of state taxes plus property taxes? Frankly I'm shocked that Ohio's revenue situation seems so dire - we paid a crazy amount in state level taxes this year (though we do live in a very pleasant area with decent schools).

Be aware folks who move to Ohio!

FWIW - I still like our Ohio town - but dang did writing that extra extra check hurt last month.
« Last Edit: April 07, 2017, 11:57:13 AM by StarBright »

FrugalHeights

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Re: Ohio Tax - seems tricky...
« Reply #12 on: April 07, 2017, 10:57:36 AM »
I HEAR YOU! It is a bit over the board.

That is why I am curious if any Mustachians have figured out how to minimize Ohio tax?
For example:
1) I am thinking to move to the same municipality (Cleveland) as my husband's work. So we do not pay 2 municipal taxes.
2) Also, move to an area without school district tax (as far as I know, Cleveland City does not have it).
3) Move to an apartment instead of a house - heating bill is very high for houses (but included in apartment rent, usually)
This should save me at least $2,500/y if not more.

Any other ideas?
Any ideas for great areas that still fit the bill?


Heroes821

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Re: Ohio Tax - seems tricky...
« Reply #13 on: April 07, 2017, 11:51:32 AM »
I HEAR YOU! It is a bit over the board.

That is why I am curious if any Mustachians have figured out how to minimize Ohio tax?
For example:
1) I am thinking to move to the same municipality (Cleveland) as my husband's work. So we do not pay 2 municipal taxes.
2) Also, move to an area without school district tax (as far as I know, Cleveland City does not have it).
3) Move to an apartment instead of a house - heating bill is very high for houses (but included in apartment rent, usually)
This should save me at least $2,500/y if not more.

Any other ideas?
Any ideas for great areas that still fit the bill?

I'd have to check with my family, but growing up in Youngstown/Warren area and most of the suburbs there I don't remember ever having to deal with that stuff on my taxes, or their taxes.  I know Youngstown gets a deserved bad rap, but a ton of people commute from there to Cleveland and the cost of living is one of the lowest in the country.