A city tax where you work, a state line that does not stop it, and a school district tax nobody mentions

Step-by-step

1. 1

   Complete the federal W-4 and the Ohio IT 4 on day one

   The Ohio IT 4 sets state withholding and is also where you give your school district number, which is what triggers school district income tax withholding if your district levies one. Leaving that field blank does not remove the liability — it just stops it being withheld.

   Via employerWho: YouFirst week of employment
2. 2

   Identify your work municipality and your residence municipality

   They are often different, and both tax you. Your employer withholds for the work city — Cincinnati's rate is 1.8%. Your residence city taxes your income too and generally credits what you paid the work city, sometimes only in part. Cincinnati credits residents for tax paid to other municipalities up to its own 1.8%; a suburb's credit may be less generous.

   OnlineWho: You
3. 3

   If you work in Kentucky, file the reciprocity form — and expect the local fees anyway

   Kentucky and Ohio have a reciprocal agreement covering wages, so an Ohio resident working in Kentucky is not subject to Kentucky state income tax and files Kentucky's non-resident reciprocal-state return to reclaim any withheld. That agreement does not cover local occupational licence fees. Covington's 2.45% on compensation, Newport's 2.5% on gross wages, and the relevant county fee will all still be withheld, from residents and non-residents alike. Ask Cincinnati's Income Tax Division in writing whether it credits those against your residence liability — the answer decides whether the job costs you an extra couple of per cent.

   Via employerWho: You
4. 4

   If you work in Indiana, check the county tax separately from the state one

   Indiana has a reciprocal agreement with Ohio covering the state adjusted gross income tax on wages. Indiana's county local income tax is a separate levy and is not part of that agreement, and since 2017 Indiana counties apply the same rate to residents and non-residents. Read the Department of Revenue's Departmental Notice #1 for the county rate table and Notice #42 for the resident/non-resident position before assuming reciprocity covers everything.

   OnlineWho: You
5. 5

   Look up your school district income tax

   About two hundred Ohio school districts levy an income tax, entirely separate from the municipal one, filed on Ohio Form SD 100. Whether one applies depends on the school district your address sits in, which does not follow city boundaries. Look up the district number for the exact address on the Department of Taxation's finder before you assume it does not apply.

   OnlineWho: YouBefore your first payslip
6. 6

   Determine your US tax residency

   The substantial presence test counts weighted days across three years to decide whether the US taxes your worldwide income or only US-source income. Your visa category does not decide this.

   OnlineWho: You
7. 7

   Check for an applicable tax treaty

   The US has treaties with around 70 countries that can reduce or exempt tax on particular income. Ohio and Kentucky both start from federal figures, so a federal treaty position generally flows through to the state return. Municipal and occupational returns follow their own rules — confirm rather than assuming the treatment carries all the way down.

   OnlineWho: You
8. 8

   File everything that applies — and there may be four returns

   The tax year is the calendar year, due 15 April. Cincinnati administers its own municipal income tax through the city's Income Tax Division; many suburbs use the Regional Income Tax Agency or the Central Collection Agency instead; Kentucky localities collect their own; and Indiana counties collect through the state return. A cross-river worker can legitimately file federal, Ohio, a Cincinnati return, a suburban return and a Kentucky reciprocal-state return in one season.

   OnlineWho: YouBy 15 April annually
9. 9

   File an FBAR if foreign accounts exceed $10,000

   Aggregate foreign account balances over $10,000 at any point in the year trigger a FinCEN filing, separate from your tax return and with its own penalties.

   OnlineWho: You