Growing up in the Columbus area, I remember where I grew up. I went to Worthington Schools, but lived in the city of Columbus. I had a Dublin telephone exchange, but a Worthington mailing address (zip code 43085) that sometime in the middle of my childhood changed to a West Worthington/Columbus mailing address (zip code 43235) all without me or my family moving. Sound familiar? Many people I have known in the Columbus area have been through this situation at least once in their lives. Although I have always found this a bit amusing, if not confusing, not knowing all of those finer details can have unintended tax consequences.
Let’s use my childhood situation from above to illustrate real consequences of not knowing. After landing a job, I go in for my first day of work. At that time not only am I meeting everyone, but I am asked to fill out all of the paperwork so my employer can properly take out the right amount of taxes. After submitting my paperwork to my new employer they process it. They see that I have a Worthington mailing address and automatically assume that they should be taking out city income tax for Worthington. What they do not know is that is simply a mailing address and not the city that I live in which is Columbus. Unless this error is caught early, two things will happen, Worthington will get income tax withholding that they are not entitled to and Columbus will not get the income tax withholding they should. Both things will cause headaches for you and your employer.
The best thing you can do is be proactive and know where you live. Don’t assume that your employer knows where you live. To help everyone, there is an easy resource available online. The Ohio Department of Taxation knows exactly where you live and has made their resource database available to the public. This site tells you what municipality you live in (or do not live in for those who live in unincorporated areas) and what local and school district income taxes are to be paid. Go to: https://thefinder.tax.ohio.gov/streamlinesalestaxweb/AddressLookup/LookupByAddress.aspx?taxType=Municipal and plug in your address to find out exactly where you live and which cities and school district you owe income taxes. This resource is also excellent for those who are starting a business and need to know who they owe taxes to.
When preparing tax returns for clients at Holbrook & Manter we have encountered situations many times were a client’s employer has not been withholding for the proper city or have been withholding taxes for the wrong city. Unfortunately, it is not as uncommon as you would hope. If you discover that the a city has been receiving money they are not supposed to, you can get that money back, but don’t wait too long or you will be limited on the amount you can get. At Holbrook & Manter we are prepared to assist you with all of your tax needs and questions.