Could moving maximize remote work savings?
For many of those forced to work from home during COVID-19, the shelter-in-place order hardly feels like house arrest.
Surveys show up to half love the time and money saved from ditching their commute.
No surprise, then, that some remote workers are hoping to maximize the savings by making work-from-home permanent, moving to a less expensive
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Indeed, recent Zillow data confirms more home searches in low cost-of-living areas.
Before making a big move, though, beware of possible pitfalls:
Know if your employer will need you on-site
Nicholas Bloom, a Stanford University professor who has long studied remote work, says that companies have become “euphorically positive” about the success of remote work in this period. But Bloom predicts that post-pandemic, “many companies” will offer work-from-home on a partial basis, say two or three days weekly.
So, moving a very long distance could be risky, but an hour and a half commute might be tolerable if it’s relatively infrequent.
Beware of the tax consequence of crossing state lines
“Forty-one states,” explains Lawrence, MA-based CPA Mark Alaimo, “tax wages of both resident and non-resident for wages earned in the state.”
For example, illustrates Alaimo, a Pennsylvania resident who earns a high wage in New York, owes some eight percent of his income to New York State. While he receives a credit for the 3.07 percent of income tax that Pennsylvania levies, he’s still paying about five percent more than he would if his employer was in Pennsylvania.
Rules vary by state, so check with a tax advisor.
Less expensive locales could mean lower pay
After Facebook announced it might adjust paychecks to the local cost-of-living for its remote employees far from pricey Silicon Valley, Bloom says many firms asked him if it’s a wise policy to consider. Bloom advises against it, but it’s an idea tossed around in the corporate sphere.