Living in USVI while working for US company

If we are self employed as a consultant and become full time residents of USVI...when my husband contracts, its usually for a year. My questions are these..working remotely self employed contracted for a mainland Co, with possible onsite travel...how do taxes work?
Second question if contract required him to be onsite for duration of contract vs remote, but our primary home is USVI where I remained...how do taxes work...its his self employed job to do as a client requires. A contract can be up to 12 months...
Will we always pay our taxes to USVI if only remote or would it follow him per contract requirment if onsite?

You will definitely want to discuss all of these question with an experienced local (not stateside) CPA. Then, if possible, make an appointment with a BIR representative to go over your return before filing - they usually have "tax help" sessions available during tax season. That is the only way to have any confidence you're doing it correctly. Make sure you get stamped copies of everything.

I believe that if all of your income is derived from US, you'll pay your taxes to them and not USVI IRB.
I live in FL but my income comes from USVI, so I pay taxes here.
Definately check with your CPA and your company, too.

Begin reading on page 9 ….

http://bir.vi.gov/pdfs/Tax_Structure_2016%20-%20Updated%2001142016.pdf

Another document to read about residency US vs USVI.

https://www.irs.gov/pub/irs-pdf/p570.pdf

Thanks very much. Do you know of any?

If you reside in USVI over 180 days per calendar year you can claim residency in VI. If you work remotely and your income is 1099 from the mainland you will pay federal tax to USVI but you may have some liability for state income tax especially if you derive 1099 from cash hungry liberal states like CA or NY. And their rates are painfully large as they are Robin Hood states. Taking from working folks to support the army of moochers. VI has no state income tax. They keep equivalent of federal tax in VI. Since you don’t derive 1099 income from VI USVI can’t get your self employment tax (5% above $9K per month).

The best case scenario is to reside in the state with no state income tax like NH, TX and few others. Or reside in VI and derive income from these state (tax free) states.

I am not a CPA but am staying in Holiday Inn.

My husband works 6 months per year in Massachusetts for his brother’s company. We live on STX. I have income from Arkansas. So, when our CPA, Jim Sheets, does our yearly taxes, we pay Arkansas, Massachusetts state taxes and our Federal taxes are paid here to the Virgin Islands. Use a CPA; file in person; get all papers stamped as received; try to owe as little as possible AND, whatever you do, do NOT have the VI owe you! We screwed up one year and they owed us. We just got return last month...3.5 years later!

if on st croix jim sheets or david johnson.

they are in christiansted

Thanks very much. Do you know of any?

AND, whatever you do, do NOT have the VI owe you! We screwed up one year and they owed us. We just got return last month...3.5 years later!

Yes, always structure your VI taxes so you owe them a little bit at the end of the year. If they owe you, an audit is always a very real possibility.

2013 we had a sizable return owed to us from our Solar Rebate. They audited us and have not paid yet. 5 years later still waiting!! They do however send us a form to claim the interest we are accruing annually so we can pay taxes on that....

Make sure your employer's health insurance works here. Last I checked, most places did not accept AETNA and some BCBS plans are not accepted. United Healthcare is big here. But if you have an HMO it might not work at many places outside your home area.

Thank you! Very much. Will do this for sure. I emailed a local CPA with this per your advise, and am hoping to hear back. We dont want honest mistakes to be misinterpreted and we would only have ourselves to blame.

2013 we had a sizable return owed to us from our Solar Rebate. They audited us and have not paid yet. 5 years later still waiting!! They do however send us a form to claim the interest we are accruing annually so we can pay taxes on that....

That is really comical and so USVI.

I know I've mentioned this before, but I was audited 4 years in a row. Owed substantial amounts each of those four years. I never got any notices about any questions on the returns and after weekly calls for about 3 months they finally told me I was in audit for all those years. I had to prove my kids were alive and living in the VI for all four of those years. I had to find my oldest son's 1st - 4th grade report cards when he was in 6th grade :-O I came through the audit with no changes to my returns but I spend a couple of weeks with the IRB on STT and had to dig up massive amounts of paperwork. It took two years for the 4 returns to be paid after they came through the audit. Currently two years behind on returns. I try not to owe them anything but the credits I have for having children usually leaves me with a credit of some sort.

I'm a bookkeeper and I have to tell you that I have never walked into any business that has paid their taxes correctly. I tell everyone who has a business to use a local CPA to advise and prepare their taxes. Its the only way to make sure they are done correctly or at least take the liability off of them personally. Something else I've noticed is that the IRB doesn't spend a lot of time looking into who isn't paying taxes locally when they should be. If your number isn't in their system they don't even look at you. Once your number is in their system they WILL look at you. And look at you hard even when there is no reason to (like me being in audit for 4 years and coming out of it with zero changes to my returns). I'm a bit of a Pollyanna when it comes to the tax topic. I want everyone to pay what they owe and where they owe it. Would it be better if we didn't have to pay taxes, yes, I'd take that! But there are laws and I think they need to be followed. The people who DO pay their taxes locally get penalized (basically) for doing so. Like gross receipts.... instead of them going after the people who aren't paying, they raise the rate on the people who are paying. Hotel tax too. With so many people renting out their rooms and homes short term rental I bet there has to be a large percentage of those people who don't pay any taxes. Not hotel, not gross receipt, not income.

stepping off soapbox now

2013 we had a sizable return owed to us from our Solar Rebate. They audited us and have not paid yet. 5 years later still waiting!! They do however send us a form to claim the interest we are accruing annually so we can pay taxes on that....

That is really comical and so USVI.

At least 50% of people in VI operate in grey economy. My plumber, electrician, gardener, builder, handymen only take cash. Never get any receipt. Do you believe they pay any fed tax on that income?

From what I heard anytime VI ows us refund the tax return will be audited. I never request a refund. If they owe me I don’t ask for the money back. Just carry over into next year as credit. My only audit was a penalty for presumably not entering SS number of my ex while I was paying alimony. I went to the IRB office, they pulled my return and here it was black and white SS number.

The tactics they employ are hitting below the belt line to nag, extort as much money as possible from these who file tax returns.
Another dark part of living in USVI.

"The people who DO pay their taxes locally get penalized (basically) for doing so. Like gross receipts.... instead of them going after the people who aren't paying, they raise the rate on the people who are paying. Hotel tax too. With so many people renting out their rooms and homes short term rental I bet there has to be a large percentage of those people who don't pay any taxes. Not hotel, not gross receipt, not income."

Amen! Julie has hit it on the head. Also taxi drivers and those who work strictly cash businesses... (Not all,but it is just too tempting for those without a moral base.)

All my guys that provide services whether it's my plumber, electrician, contractor, appliance repair, yard maintenance, handyman, etc., ALL provide receipts when I pay them whether I do so by cash or check.

I also pay them promptly and they respond promptly which is why we continue to do business over the decades.

Thanks very much

Thank you! Thank you!! That really covered it.