Federal Income Taxes

There are no Federal taxes deducted but the VI tax that is deducted is the same amount as the Federal tax that would be deducted if you were paying Federal taxes.

Just to clarify, the same U.S.federal IRS tax forms are used here in the V.I.and the deductions are just the same. The only difference is that you file these federal forms here at the IRB (Internal Revenue Bureau as opposed to the federal Internal Revenue Service and the taxes stay in the Virgin Islands. The forms are no different from those in the US, the deductions are the same. Hope this helps.

I heard that tax refund slow to come to the residents of the VI __ Is this true?

I'm still waiting for mine for last year's taxes. Not holding my breath. Now I'm trying to find out if there's a way they'll allow me to take it as a credit against this year's taxes owed... but they don't like that idea, either.

Yikes! So basically the government there will overcharge you for taxes and then not issue a refund? Sounds like theft to me...
Of course then again, I am not yet an islander so I guess I have different expectations. 🙂

It sounds as if the best way to deal with this situation is to be sure to take your maximal exemptions throughout the year, and have to owe them money at the end. I have a "feeling" that the government is not slow and inept at collecting monies owed to them.

Just for clarification... the forms are the same, but how about everything else? Tax brackets, April 15th deadline, deductions...

Forms, brackets, deadlines, deductions are all the same except that your tax dollars stay in the VI.

It has always been a big thing to get an IRS refund. For the life of me I never understood it. You work hard all year, have more money taken out of your paycheck than you need to pay your guestimated taxes, let someone else-the gov't-use this, er your money to make money and then get all excited because your getting a refund, your money back, to take a vacation or buy some furniture, etc.

When in reality....you could've socked that money away each week, put it in a 401K, savings, or something of the sort. The gov't loves the refunders....they just made a fortune off your money.

Btw, I owe around $ 62 in taxes this year.....the closest I've come to $ 0.

Just thought....maybe that's a new business venture for me. You send me $ 50 each week for the whole year. Come March of the next year (need to get a few more mos. of interest before I return it) I'll return the $ 2,600. to you. Now if I can get the whole US working population to do the same thing.......WOW!

Anybody have some potential names for my new business (for fun: please be creative)

Folks,

Timing of refunds seems to be random. We filed for our first time as VI residents in April of last year, and had heard the horror stories about refund delays. Two friends haqd already paid their second year of taxes while still waiting for the refund due from the previous year, and one other friend reported a wait of years before her first year refund arrived.

We were quite surprised, then, when our refund showed up last November -- and with interest paid on it. This was just one in a string of experiences that seem to place us in the "results not typical" category, along with closing on our house, setting up or WAPA account and getting our phone and cable service ordered all in ONE afternoon, and then having all those services live at our home within 48 hours. (We feel so special!)

This is just another example of why living in the VI requires a great deal of flexibility and patience -- each person's experience is quite unique.

--HC

From yesterday's New York Times, "The economic development program allows an effective federal income tax rate of just 3.5% for bona fide residents of the Virgin Islands.", while postings above indicate, "Forms, brackets, deadlines, deductions are all the same except that your tax dollars stay in the VI.". Can anyone clarify these seemingly inconsistent statements?

Matt,

The EDC information applies to companies, not individuals.

Are we talking federal refunds or local?

For a company to even apply to see if they can be approved for EDC tax benefits, it costs them usually at least $50K in attorney's fees and filing fees. If they are approved, the company does get many tax incentives and lowered rates. They in turn agree to hire a certain number of "local" employees and to keep the ratio of local to non-local employees above a certain level. They provide benefits to their employees and also are required to make a certain level of charitable contributions on the island. There is more to it, but this tax benefit does not apply to the individual tax payer out there.