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Pre-Move Tax Consultations: Strategies for Managing Remote and Relocated Employees Tax Compliance

6 min read
Two employees sitting across from a tax relocation specialist. Analyzing pre-move tax compliance.

Navigating global tax regulations can be a complex and challenging process for companies and their employees. In particular, mobility tax compliancy has become more complicated than ever, whether you have a few mobile employees or an entire mobile workforce that work within different states or countries. That’s where Ineo’s Tax Services comes in – providing Pre-Move Tax Consultation to ensure tax compliancy and prevent any potential tax issues! Read on to learn how working with an Ineo tax expert and utilizing our Pre-Move Tax Consultations can maximize your Global Mobility program and prepare employees for their relocation or assignment.

How critical is tax compliance for my mobile or remote employees?

Tax compliancy has always been a critical issue for companies, especially in recent times due to rising audits and heightened scrutiny from tax authorities following the COVID-19 pandemic and the age of digital nomads. Companies need to ensure they are compliant with local and multinational tax laws and regulations in all the jurisdictions they operate in. So, how can companies ensure that they’re keeping up with necessary tax filings, filing correctly per employee, and ensuring all around compliancy?

It is critical for companies to understand the tax regulations within different states and countries to ensure they are making the right decisions when setting up their employees in new locations:

“Many companies often overlook the different rules in various states, which often leads to non-compliance issues. Even moving from one U.S. state to another can be more complicated than moving from one country to another” – Ineo’s Chief Compliance Officer and Co-Founder of Ineo Tax Services, David Oltman, SCRP.

What are Payroll Taxes and how does it affect me and my Global Mobility program?

Moreover, one of the common issues companies face is compliance within payroll taxes. Payroll taxes can significantly vary between different states, adding to the complexity of global tax regulations. One of the most important things companies can do to ensure payroll tax compliance is to ensure their payroll systems reflect the tax requirements of their mobile employees’ host or new location. This includes updating tax tables, calculating withholding taxes based on new tax rates for new jurisdictions, and providing employees with accurate W-2 forms. With the current work from home trend, this issue has become even more significant as employees are now working outside of their usual place of work, which may not coincide with the established work locations set up by their companies.

Furthermore, payroll managers and departments should be aware of the various withholding requirements within the destination locations of their employees. Every country and state has different withholding regulations, and companies must have a full understanding of these regulations to ensure they remain compliant with local requirements. Employers should monitor tax jurisdiction changes regularly – with constantly evolving tax laws, it’s critical to stay up to date with any modifications that could impact payroll tax compliance.

However, it’s not just about ensuring company compliance with tax regulations, but also ensuring employee compliance. For employees, it is important to understand the tax regulations within the state or country they are moving to:

“The need for a Pre-Move or Pre-Assignment Tax Consultation is paramount. An employee who is moving needs a consultation so they can become educated on major tax issues and understand regulations such as the convenience of the employer rule” –  Ineo’s Chief Compliance Officer and Co-Founder of Ineo Tax Services, David Oltman, SCRP.

For example, the convenience of the employer rule is a standard that often gets overlooked in today’s world of digital nomads and remote work. This rule is applied to employees who work remotely, that is, they work in a state that is different from their employer’s state of operation. For instance, if an employee is based in New York but has a company located in Illinois, then they are required to pay Illinois payroll taxes because the location of their organization determines their tax compliance obligation. As an employer, it’s important to understand and comply with these regulations to avoid any legal issues. Employers will need to ensure they are following this rule when setting up employees in a new location.

Therefore, it is imperative that your Global Mobility program offers complete tax knowledge and education for your employees. A Pre-Move Tax Consultation offers invaluable information that everyone at the organization can use. This simple step can prevent major tax mistakes from taking place.

Ineo Tax Services and Pre-Move Consultation Services are for everyone!

We know that was enough to make your head spin, but don’t panic! Ineo’s Tax Services provides Pre-Move Tax Consultations that aid both companies and their employees to navigate the nuances of tax regulations. With the current trends in remote working and Global Mobility, it has become even more critical for these consultations to occur. The consultations provide essential knowledge on tax compliance for employees and companies, ensuring both parties are prepared to meet the tax obligations of their new working arrangements:

“Although 90% of the time Ineo is requested to give tax assistance on international tax assignments, we believe that is because companies and their employees don’t realize that a service such as a Pre-Move Tax Consultation is imperative for smaller moves, too. In some instances, these moves [NJ to PA or other state-to-state moves] can be more complex than moving country to country” – Ineo’s Chief Compliance Officer and Co-Founder of Ineo Tax Services, David Oltman, SCRP.

Maximize your Global Mobility Program and Payroll Tax Compliance with Ineo Tax Services

In conclusion, tax compliance is a complex area for companies and their mobile employees. With the current trends in remote working and Global Mobility, it has become even more critical to ensure both parties are adhering to tax regulations in all jurisdictions they operate in. Ineo’s Pre-Move Tax Consultation ensures employees are well-informed about the tax regulations they are required to follow, and companies are up to speed with updates to payroll systems and multistate regulations, to ensure tax compliancy. By working with Ineo, companies and their mobile employees can avoid costly fines, audits and reputational damage!

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