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beachy
(@beachy)
Trusted Member

Further to what Betty said...do not EVER throw out a receipt or cancelled check or whatever from a payment to the VI gov't. I'm not talking about the 5 or 10 dollar charges, but keep a copy of any tax return you ever file along with payment receipts, etc. I've seen them come back 15 years after the fact and want to be paid again..on real property taxes and corporate filings as well as tax returns..and they are serious about your having to pay it again if you can't produce the documents..refusing to issue business tax clearance letters etc.

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Posted : April 3, 2009 2:50 pm
newarrival
(@newarrival)
Advanced Member

Does anyone on the board get a W-2 from the mainland and file taxes here in the VI? If so, do you get a refund from the VI? We are soooo confused. And we really want to get our refund!

Thanks for any help. Feel free to PM me.

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Posted : April 4, 2009 10:11 pm
dntw8up
(@dntw8up)
Trusted Member

Our W-2 comes from the states, we file taxes in the VI, and after the first year our refunds come from the VI. Where you file is based on where you live and work, not where your employer is located. We eventually even managed to get our employer to withdraw and pay VI taxes! You file with the VI if that is where you reside on December 31, even if you lived the majority of the year elsewhere. There is a special form you need to file in addition to your 1040. The VI will forward your return to the Feds, and the Feds will issue any refund you are due from them for the partial year. The first year we filed in the VI the Feds audited us, to ensure that the revenue they were losing by our claimed move to the VI was legitimate. This resulted in our first year refund arriving three years late, but the refund included thousands in interest. We actually received a couple of the following years' refunds from the VI before the Feds paid for the audited year.

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Posted : April 4, 2009 11:23 pm
meowruff
(@meowruff)
Advanced Member

We have always filed our own taxes (not needing an accountant) but, after reading this, I'm more confused than ever. Any help would be appreciated. Here's our situation.

My husband and I have lived here at least 183 days during the 2008 tax year.
We had income from Indiana and from the Virgin Islands.

My understanding is this...
We need to file Form 8898, stating that we are residents of the VI.
We need to file and pay our taxes HERE, and they will forward money owed to the mainland.
We need to bring an original AND a copy to get stamped for our records.
We need to keep these copies FOREVER.
We need to file and pay Indiana taxes for income received during the beginning of 2008.

Does this sound correct? Am I missing anything? Thanks for your help.

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Posted : April 5, 2009 12:29 am
stiphy
(@stiphy)
Trusted Member

Meowruff,

My understanding is that you are correct about where to file...BUT, who has your money now? Did you have W2 withholdings? If so did your employer pay the VI or the Fed? Honestly, for your first year I'd get an accountant as it gets confusing quickly and the rules change constantly as the IRS and BIR don't play well together. In theory they are supposed to coordinate efforts but this is not usually the case and they will put YOU in the middle of any dispute with one side saying YOU owe money and the other side saying that you aren't entitled to a refund. The laws and regs aren't clear cut, change constantly and are also blatantly disregarded by the VIBIR at times. The only way things are gonig to clean up is when someone starts challenging them in court and rulings are made. Of course I don't sense that anyone is volunteering to do that 🙂

Indiana taxes are subject to the law of that state, I think there are some states that would actually give you a full refund because of the limited amount of time you spent there.

As for the December 31st thing, that is questionable now in my understanding because of the changes made in 2004 requiring 183 days in the territory to file as a VI resident with the BIR. What I have been advised is that UNLESS you spent 183 days or more in the teritory you should file with the IRS and do an allocation to the VI. Opinions differ on this and again I'd recommend getting an accountant that is familiar with this scenario.

Disclaimer, I am just victim in all of this mismanaged/unorganized/annoying stuff as well and in no way am an expert!

Sean

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Posted : April 5, 2009 3:05 pm
dntw8up
(@dntw8up)
Trusted Member

meow,

Your list is accurate and complete. The IRB deals with many first year VI filers annually and works well with the IRS on forwarding their payments and obtaining their refunds. The IRB seems to try harder to get these returns right, because there is Fed oversight in terms of file sharing due to your having lived part of the year in both tax jurisdictions.

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Posted : April 5, 2009 5:01 pm
Betty
(@Betty)
Trusted Member

This is what we did our first year here based on a cpa advice. We filed in the state we were from, paid our state and federal for the time we lived in that state. And then filed here in the usvi for the time we were here.

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Posted : April 5, 2009 5:06 pm
beachy
(@beachy)
Trusted Member

We file in the states, and pay IRS and the state tax, and have withholding done there on salary and estimated. We also file in and pay the VI, but it's different money. Was "interesting" one year, working for a stx company, with a W-2 VI, paid tax to the VI, where the money was also withheld, and filed US and state taxes on different income amounts. Later on, the Feds decided I needed to pay them the exact same amount of tax as I had already paid the VI on that VI salary. Even though IRB gave me certified forms etc, to send to the Feds, it had gotten to the Certified Mail stage from the US IRS before someone there actually listened to me, and saw that the money and tax wasn't theirs.

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Posted : April 5, 2009 5:39 pm
meowruff
(@meowruff)
Advanced Member

More questions about this crazy tax situation...
Form 8898 - Do we take this to the IRB on island or do we send it off somewhere?
Federal Taxes - We owe (ouch!), but does the IRB take a personal check or debit card?
Does anyone know their hours that they are open tomorrow (Tuesday)? Each time I have tried calling, the phone just rings and rings and rings and rings.

Thanks for any advice.

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Posted : April 13, 2009 3:56 pm
dntw8up
(@dntw8up)
Trusted Member

Form 8898 gets mailed to Philadelphia.

The IRB takes a check.

I think they have regular business hours on the 14th and extended hours only on the 15th.

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Posted : April 13, 2009 6:40 pm
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