If you live in Archbold, one more small piece of paperwork just entered your life.
Thanks to action by Archbold Village Council at its Monday, Oct. 7, meeting, Archbold residents over the age of 18 must file an income tax return.
As with all things tax, there are exemptions. If your sole source of income is social security, a pension, or disability compensation, you do not need to file.
The good news? It’s not that hard.
Marcia Franks, village income tax commissioner, said the new form IR will be available on the village of Archbold website (www.Archbold.com), at the library, or several other places.
All the information you need will come with your W- 2– the form the federal government requires your employer to provide you, which is your wage and salary information.
You will need to attach a copy of your W-2 form to your Archbold income tax return form.
If you have a Certified Public Accountant or other tax preparer file your taxes, that person will take care of filing the Archbold form.
There are several different situations that involve people who live in Archbold, but work elsewhere.
For example: You live in Archbold but work in Wauseon. Franks said since Archbold and Wauseon both charge a 1.5% income tax, Wauseon collects the tax from the check, and you don’t owe anything to Archbold.
“We give you what they call ‘reciprocity credit.’ Archbold allows a full credit of 1.5%,” she said.
But as of April 15, 2020, you will still have to file a village of Archbold return.
Another example: You live Archbold but work in Hicksville or another community where the tax is less. In Hicksville’s case, it’s 1%.
In that situation, you will file an income tax form, get credit for the 1% you paid to Hicksville, then you’ll owe Archbold one-half (.5) of one percent.
What about if you live in Archbold, but work in a city where the tax is higher, say, 2%?
“You’re only going to get (reciprocity) credit for 1.5%, because that’s all we’re going to allow,” Franks said.
“You are working in a city (with a higher tax), and that city trumps us. You’ve got to pay the 2% to them, but you don’t have to pay anything else.”
In a prepared statement, Franks said, “In an effort to maximize all income tax collections, the village of Archbold will go to mandatory tax filing for all residents within the Archbold corporation limits over the age of 18, regardless of income or liability, starting with tax year 2019,” due April 15, 2020.
“One thing I do want to stress is it’s within the corporation limits,” she said.
“It’s not for people that are living out on Co. Rd. 20, and it’s only for people over the age of 18 regardless of income or liability– that means how much you owe,” Franks said.
However, if you live outside the village and made extra income by, for example, mowing lawns inside the village, you must file a return and show that income.
In the past, if you worked out of town, a business would collect what you owed in taxes to Archbold, then send the village the money in a process called courtesy withholding.
But a change in state tax law imposed more requirements on businesses that did courtesy withholdings, and some penalties for missed deadlines.
Franks said rather than risk exposure to fines and penalties, companies stopped courtesy withholdings.
That made it the responsibility of the employee to cover the tax bill.
In the past, the only time someone would come into the income tax office was when the person signed up for water service for the first time.
Franks said there were people moving around to different jobs or starting small businesses, and were not paying their taxes here.
“We were not catching those people,” she said.
Franks said she had no idea how much money the village was missing because people weren’t paying taxes.
“I wouldn’t want to speculate,” she said.
Franks said she will remind residents of the new requirement several ways, including messages in water bills and postcards.
There are penalties and added interest for those who file late.
“But you know, I realize this is something new for all the residents, and it’s not going to be easy to get everyone that first year or couple of years.
“So it’s going to be at the tax officer’s discretion on (whether to impose) interest and penalties,” she said.
A Lot of Forms
In the village income tax department, are Franks and Melissa McKeever, a parttime assistant.
Come April 15, 2020, there could be a lot of returns to process. Is she bringing in extra help?
“No, we’re going to just wade through these by ourselves. We’ve got some new efficient software… we’ve got some efficient tools to help out with that,” she said.