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How remote workers and their employers can avoid a tax nightmare

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How remote workers and their employers can avoid a tax nightmare

This article is part of the Future of Work briefing, a weekly email with stories, interviews, trends and links about how work, workplaces and workforces are changing. Sign up here.

If you thought 2020 was a messed-up tax year because of COVID-19, remote working and the wildly different laws from state to state, just wait till you get a load of what this year’s got in store. 

Factors ranging from the end of tax holidays to child tax credits to reciprocity rules between jurisdictions threaten to create mass confusion when it comes to employees’ personal income taxes and employers’ payroll taxes alike, as states get more aggressive about clawing back revenue they lost due to the pandemic.

While much has been written about COVID’s impact on tax obligations, experts acknowledge that confusion reigns. We had some tax specialists break down the most important questions that face employees and employers.

Here’s what you need to know. 

Employee vs. independent contractor 

Increasingly, the lines between employees and independent contractors, or freelancers, are becoming blurred, according to Kelly Erb, a tax lawyer and journalist who writes for Bloomberg and the blog TaxGirl.com. But there are ironclad differences between the two for tax purposes. “You are not self-employed just because you are working from home,” Erb said. 

Other than receiving a W-2 instead of a 1099 form at the end of the tax year, why does the distinction matter? Because the Tax Cuts and Jobs Act (aka, the Trump tax cuts) means that you cannot deduct home office expenses if you are an employee, Erb noted, adding, “There is no hardship exemption or coronavirus waiver.”

Not only can employees not write off their office space — they cannot claim work-related expenses like that new laptop, smartphone or their utility bills on their tax returns. That said, many employers have allowed this through the pandemic at their own discretion.

Level with the boss

If you decided to up and move to the beach for the duration of the pandemic, it is up to you to inform your employer. Employees need to provide their bosses with any documentation or information related to the dates of travel or a move out of state, according to Thomson Reuters content editor and tax expert Carlton Huntley.

A recent survey by the San Francisco-based talent mobility platform Topia, revealed that while 28% of employees have worked outside their home state or country during the pandemic, just one-third reported all those days to HR. “As a result, both parties are at risk of hefty penalties in the event of an audit,” said Nishant Mittal, svp and general manager of business travel at Topia.

Ernie Villany, founder and president of accounting firm Boulder Valley CPA in Colorado, added: “Under COVID, people are living in Airbnb’s, they’re living in campgrounds, living in Airstreams. They have to be measuring the days they spend in those communities and in those states because they could be creating a filing obligation that they are completely unaware of in more than one state.”

In 24 states, working for even one day in a state technically obligates a taxpayer to file a return in that state, said Jared Walczak, vp of state projects at the Tax Foundation, a tax policy nonprofit. “More importantly, as people have moved around, even temporarily, during the pandemic, they may have worked enough in multiple states to have tax obligations in multiple states,” he said. 

Know the law

Thomson Reuters’ Huntley advises employees to check the tax policies of the states where they deliver their work — and those they reside in — to see whether they have any specific provisions enacted around those working remotely due to COVID-19 protocols.

As Nicole DeRosa, senior tax manager at the New Jersey-based accounting firm Wiss, notes, many states, due to the significant rise in remote work, have issued temporary guidance with respect to employer withholding (tax deduction) requirements. However, many are ending their temporary guidance and reverting back to pre-pandemic rules, which could impact an individual’s tax situation. 

For example, New York imposes a “convenience of employer” rule, which subjects employees to income taxes in the employer’s state, even if the employee is working out of state. “In an effort to recoup lost revenue, New York is specifically targeting individuals who are claiming less income allocated to New York compared to prior years,” said DeRosa. 

Again, the burden of responsibility falls squarely on the employee.

Lynn Gandhi, partner in the Milwaukee law firm Foley and Lardner said that remote workers need to be aware of each state’s requirements and whether they’re considered a non-resident deemed to be earning income in that state. “[A remote worker] cannot rely on their employer to have properly withheld all required taxes — it’s the individual, the remote worker themselves, who will be liable for any taxes due,” she added.

3 Questions with Bjorn Reynolds, founder and CEO, SafeGuard Global

Remote working is here to stay, but businesses have taken different views on whether to reduce salaries based on location. What’s your view?

We [as a company] want to have the best talent anywhere in the world, period. So when you find the best talent, to then say because you’ve moved I’m going to take your salary down, isn’t the right way to think about. Of course, a lot of people [employers] may have stopped employing in the U.S., and moved their operations to another country, because they can lower their salary bills. But it’s gone too far now, especially with remote access. We believe in trying to normalize salaries — it doesn’t matter to me which country you’re from, it matters to me what you can do. And it matters to me that you’re able to be here for a long time happy, content, excited.

How should individuals who want to work remotely negotiate on salaries?

If you’re really good at what you do, I’d look at where these companies come from, where they’re hiring from and tell them what your expectations are right now. Be clear — it’s a very pro-worker market right now. So ask what’s the best environment and package that I can get as a remote employee? What benefits can you give me? What vacation days, what sort of supplemental benefits do they provide and then of course the salary. But it’s important to focus on that whole package. And the second big thing to look at will be what the culture is of the company: How do they do manage remote employees? Because I don’t want to become someone forgotten —left out, here and there, as a remote employee.

What advice would you give people who want to work remotely for a company that’s overseas, for the first time?

Often when businesses want to employ people abroad, they don’t have an entity [in that country]. So they ask you to be an independent contractor, and they will pay you as a contractor. So they’re almost trying to force your employment categorization. That’s a big no and something I would question, because say if you’re in the U.K. and your’e caught doing something wrong [by HM Revenue and Customs] you’re who gets punished. They [the company] has never been in the U.K. So a big watch out sign is on that — don’t be fooled by that. We see a lot of companies trying to circumvent government rules. There’s been a huge paradigm shift that the employee is now the one in charge.

By the numbers

  • 40% of 4,924 employees polled globally, said they plan to leave their job in the next three to six months and 64% of those considering leaving said they would do so without another job in hand.

    [Source of data: McKinsey ‘Great Attrition or Great Attraction’ report.]

  • 75% of professionals say it’s important their employer requires all employees to be vaccinated before returning to the workplace, with 27% saying they will not return to the workplace without this requirement.

    [Source of data: LinkedIn.]

  • While working from home, 50% of 1,002 U.S. adults talked themselves out of using a sick day and 33% because they believed their supervisor would be suspicious of their reasons for doing do.

    [Source of data: Skynova survey.]

What else we’ve covered

  • While some employers may regard employees having a side hustle as an unwelcome distraction, others are actively encouraging their staff to pursue them. 
  • Bosses everywhere are anxious to dial up the fun by booking in company retreats, so that colleagues can reconnect in person after so long apart. And some have extra dollars to burn.

  • “I’m not comfortable”: The uncertainty around delated office reopenings has left at least one tech startup marketing strategist feeling anxious after finding remote work to be more productive and, as a woman of color, less daunting than in-office work. 

This email briefing is edited by Jessica Davies, managing editor, Future of Work.

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Roblox settles NMPA lawsuit, paving path to music in the metaverse

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Roblox settles NMPA lawsuit, paving path to music in the metaverse

Roblox Swordburst 2 and Flood Escape

Roblox Swordburst 2 and Flood Escape

Image Credit: Roblox

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Roblox announced today that it has settled a lawsuit filed by the National Music Publishers Association (NMPA). The lawsuit from the NMPA has been summarily dismissed, and Roblox will be open to further agreements with artists who want to debut their music in the game world, as they can now make their own deals with Roblox.

The NMPA originally sued Roblox for about $200 million for copyright infringement. Now the two companies appear to have come to an agreement that will allow music within the metaverse, or at least it will give publishers the chance to decide whether or not they are willing to allow it. NMPA President David Israelite called Roblox “a unique platform for musicians and songwriters in the metaverse” and said it offers unique options for artists to connect with fans.

According to the NMPA, this new settlement will allow Roblox to broker more agreements with music publishers going forward. They now have “an industry-wide opt-in open to all eligible NMPA publishers” with Roblox as well as a negotiating period that allows publishers to work out individual licensing contracts. The NMPA adds that these deals will offer new ways for songwriters to monetize their music.

Roblox has recently begun expanding its music offerings, most recently with the addition of Listening Parties — in-game music streams in which artists can show off their work. It’s also held several virtual concerts within its metaverse for users. Roblox’s Global Head of Music Jon Vlassopulos said in a statement: “We are pleased that the publishing industry sees the potential of Roblox to be a significant creative and commercial opportunity for its members.”

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The NMPA also recently settled a similar issue with Twitch, wherein it didn’t exactly condone the widespread use of licensed music on the platform, but it did leave the possibility open for individual artists or labels to have their own deals with the platform — an “opt-in” it described in almost identical language to its settlement with Roblox. The NMPA said this agreement will allow artists to find their audiences: “From virtual shows to studio sessions, the partnerships stemming from this agreement will connect the Twitch community in many ways to the music they enjoy.”

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How IT managers plan to deal with rapidly growing API complexity

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How IT managers plan to deal with rapidly growing API complexity

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The rapid increase and ceaseless evolution of API technology has ushered in a challenging new era of API complexity. A new study of IT leaders by Axway reveals that the average enterprise currently uses three different API management vendors, and plans to engage more to reach an average of four by 2023. In some countries, the number could even grow to five different API management solutions on average per company.

While 44% of IT leaders primarily benefit from reduced IT complexity and/or better oversight, 34% of enterprises do not have access to the multi-management capabilities needed to master API complexity, though 66% say they have some kind of plan in place to master these complexities.

There was a surprisingly strong correlation between enterprises that have mastered API complexity with an API-first approach (those who can build APIs the quickest), and the number of digital projects they can launch each year. Enterprises that build APIs in a matter of hours or days are more likely to launch more than 40 new digital projects every year, while enterprises that need weeks or months tend to launch fewer digital projects per year.

The study also showed the same correlation between the number of digital launches and the time to onboard new partners, or how often enterprises are able to reuse APIs. Companies stand to save nearly US$ 30K on average every time they reuse an API.

Axway, a global API Management company, analyzed new data from more than 800 senior IT and business decision-makers in the U.S., U.K., France, Germany, Australia, and Singapore. The study concluded that API complexity is negatively impacting the bottom line, raising numerous challenges and pain points — from security to governance to innovation and many others.

Read the full report by Axway

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Use your TV as a computer monitor: Everything you need to know

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Use your TV as a computer monitor: Everything you need to know

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Will that big, sexy screen look as good on your desk as it does in your living room? Let’s dig into the specifics of using an HDTV with your PC.

pcw windows10 tv

Getty Images / Dmitriy Moroz

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You’re not the first person who’s wondered what it would be like to have a giant desktop monitor. Think of all the multi-tasking and immersive gaming you could manage if you had a 50- or 60-inch monitor instead of a standard 24-inch monitor! But you’ve probably noticed that as monitors get bigger, they also tend to get prohibitively expensive.

You’ve probably already got a big screen in your house, though—a high-definition television. At the end of the day, isn’t an HDTV just a giant, living-room-oriented computer monitor?

Not exactly. While you can use a TV as a computer monitor in most cases, that doesn’t mean it’s the best option. In fact, it’s likely less attractive, convenient, and usable than you think (not to mention, probably not that cheap). There’s a reason dirt-cheap 32-inch HDTVs aren’t flying off the shelves to be used as budget-friendly jumbo screens.

You definitely can use an HDTV as your PC’s display, though, and your television can also work in a pinch if you suddenly need a second screen. Here’s everything you need to know about how to set up a TV as a computer monitor—and why you might not want to.

Will it even work?

The short answer: Yes. You may need a special cable, depending on your PC’s outputs and your HDTV’s inputs, and you’ll need to check a couple of settings, but you shouldn’t have too much trouble hooking most modern PCs up to most modern HDTVs. 

Modern HDTVs have HDMI outputs. Some older HDTVs have DVI inputs, and some even have VGA inputs specifically designated for “PC use.” If your graphics card has an HDMI output, you’re good to go: Just use an HDMI cable to connect your PC to your HDMI.

dsc01797 Brad Chacos/IDG

All modern graphics cards (like this Sapphire Pulse Radeon RX 6600 XT) include at least one HDMI port (second from left, between several DisplayPorts).

If you’re using an older graphics card or motherboard that only has a DVI output, you can snag a cheap DVI-to-HDMI cable and plug it into your HDTV’s HDMI output. Amazon sells a six ft. AmazonBasics version for just $7. Although some older HDTVs and some older computers only have VGA inputs/outputs, they aren’t not an ideal choice. VGA’s an analog signal that will give you a far fuzzier, lower-resolution image than you’ll get with an HDMI or DVI cord.

If you want to use your HDTV as a second or third monitor, you may need to use a different port, such as your graphics card’s DisplayPort output. In this case, you’ll need to use a different cable (DisplayPort-to-HDMI). The main advantage to using the DisplayPort output instead of DVI or VGA is that HDMI and DisplayPort carry both video and audio signals. A DVI-to-HDMI cable can transmit both video and audio if your graphics card supports HDMI audio via DVI—unlikely if it doesn’t have any HDMI ports—while VGA only transmits video. If you use DVI or VGA, you will most likely need to connect your PC’s audio up to the HDTV separately, or use external speakers or a headset.

Bottom line? Try to stick to HDMI if or DisplayPort-to-HDMI connections if it’s possible. It’s the easiest solution.

Getting your PC ready

You’ll also need to determine whether your graphics card (or your PC’s integrated graphics) is capable of outputting at the resolution of your HDTV. To do this, you will first need to find the resolution of your HDTV by consulting the manufacturer’s manual. Some HDTVs have non-standard resolutions; it’s not a given that your HDTV will be supported. Most stick to standard 720p, 1080p, or 4K resolutions however. Next, find the maximum resolution your graphics card/integrated graphics supports.

display adapter properties Brad Chacos/IDG

Open the Windows 10 Start menu and head to Settings > System > Display > Advanced display settings > Display adapter properties for Display 1. In the window that pops up, click List All Modes. Find the resolution that matches your HDTV’s resolution and select it. 

If you’re using the HDTV to supplement a standard computer screen, simply follow our guide on how to set up two monitors to tell Windows how to manage both displays. 

Will it look good? Maybe. It depends on how you’re using your HDTV.

HDTV features to keep in mind

If you’re turning your HDTV into a PC-backed multimedia powerhouse, and you plan on using it primarily as a television and streaming hub—e.g. a screen you’ll continue to view from several feet away—it will probably look fine. But if you’re trying to stick a 60-inch HDTV on a desk, you’re more likely to end up with headaches and eye strain.

There are a few different factors to keep in mind if you want to use an HDTV as a computer monitor.

Pixel density

Pixel density, or the number of pixels packed into one square inch of screen (measured in pixels per inch or ppi), is the most important factor to consider. A 15.6-inch laptop screen with a 1920 x 1080 resolution has a pixel density of 141.21ppi, while a 32-inch HDTV screen with the same resolution has a significantly lower pixel density of 68.84ppi. The lower the pixel density, the less clear and detailed the image becomes.

But the importance of pixel density decreases with viewing distance. The further you sit from a screen, the lower the pixel density need to be for you to have a comfortable viewing experience. You won’t have any problems looking at a 15.6-inch/141.21ppi screen from two feet away, but you will find it much harder to view a 32-inch/68.84ppi screen from the same distance. This is why a “Retina” screen on the iPhone has a pixel density of 326ppi, but a “Retina” screen on the Macbook Pro has a pixel density of just 226ppi.

55r635 front hero TCL

A normal user typically sits between two and three feet away from a desktop monitor. To comfortably view a monitor at this distance, you should aim for 80ppi or higher. This means that for 1920×1080 (1080p) resolution, your screen should be no larger than 27.5 inches diagonally, and for 4K sets, you’ll want to max out at 55 inches, like the $700 TCL 6-series 4K UHD quantum dot TV shown above. It’s our favorite bang-for-buck HDTV.

Important: “4K” is not a market standard. A 4K HDTV can mean 4x720p (3840×2160 resolution) or 4x1080p (4096×2160 resolution). Most models use 3840×2160, but you should check the exact specs of your model to determine pixel density.

Input lag

Input lag is the delay between movement you make on your input device (in this case, a mouse and keyboard) and what displays on your screen. While most computer monitors prioritize minimal lag times, HDTVs generally do not—they prioritize (laggy) video processing instead. These extra milliseconds may not seem like they matter, but they will make a massive difference if you’re trying to do something like competitive online gaming.

DisplayLag maintains a good database of input lag times, sortable by display type. An input lag of less than 30 milliseconds is considered good for an HDTV if you’re using it as an HDTV. For a computer monitor, you’ll want to aim for less than 20 milliseconds, and the lower you can go, the better.

Response time

Often confused with input lag, response time describes how long it takes for a display’s pixels to switch colors between scenes. HDTVs and computer monitors can have very different response times. HDTVs tend to prioritize richer colors, higher contrast, and wider viewing angles—all of which lend to a longer response time. Computer monitors tend to drop some of the image processing and viewing angles for faster response times. If you use a display with a slower response time, you may see “ghosting” in fast-paced video and gaming sequences.

lg oled55e8pua rear inputs LG

Also pay attention to the type and number of ports. This is only one of two port areas on an LG TV. Many TVs offer ports nearer the side as well for the sake of easy access.

Some HDTVs have a “game mode” setting, which cuts some of the image processing to improve both input lag and response time. If you plan to play PC games on your TV, definitely dig around in your HDTV’s options to see if it has this feature.

Refresh rate

Another factor that may affect performance is a display’s refresh rate. Refresh rate is the number of times a display “refreshes,” or re-draws, its image each second. Most modern displays have a refresh rate of 60Hz, which means they refresh their image 60 times per second. But you’ve probably also seen higher-end gaming monitors and HDTVs with higher advertised refresh rates—120Hz, 144Hz, or even 240Hz. This can be misleading, however, because a computer monitor with a 120Hz refresh rate may not be the same as an HDTV with a 120Hz refresh rate.

The reason for this is because the content people watch on a television is produced at either 24fps, 30fps, or 60fps. The content people view on a computer monitor can be very different—many games can output frame rates higher than 60fps if you have a powerful enough graphics card.

An HDTV with a high advertised refresh rate may use post-processing technology to achieve that rate, such as by creating additional frames to upscale content, or by adding black frames between each frame to prevent image blur. The good news is that this probably won’t make a difference if you’re not playing PC games at very fast frame rates. But if you have a PC designed for the best possible gaming experience, hooking up an HDTV instead of a computer monitor likely means that you’re not getting the most out of your machine.

Is it worth it?

There’s no harm trying to connect your computer to a TV you already own to see if it works for you. Go for it!

pcw windows10 tv Getty Images / Dmitriy Moroz

Our advice varies if you’re shopping though. If you’re looking to get the best bang for your buck, an HDTV isn’t necessarily going to save you money over a monitor. In fact, if you’re purchasing a new display, I recommend sticking with the tried-and-true computer monitor. For one thing, smaller, cheaper HDTVs are typically 720p resolution, not 1080p, while similarly priced monitors will almost always be 1080p. So if you’re looking for something under 27 inches, an HDTV will probably be more expensive and lower-resolution.

These lower-priced 1080p monitors often support AMD’s FreeSync adaptive sync technology as well, which can help your games look buttery smooth. You won’t find that in a cheap TV. 

If you’re looking for something larger than 27 inches, remember that pixel density decreases significantly with every few inches you gain, and there’s a reason HDTV-makers suggest sitting several feet away from their displays. If you need a display that will multitask as an up-close work/email display as well as a movie/entertainment display, you’ll want something with a high enough pixel density that text won’t be a pain to read—and even with a high pixel density, a large display may still cause eye and neck strain if you sit too close to it.

twitch stream Twitch

An HDTV as a secondary monitor is perfect for streaming Twitch, watching Netflix, or keeping an eye on Twitter in real time.

There is an ideal situation in which the HDTV-as-monitor shines, though.

If you want to add an extra display to a single- or multi-display setup for entertainment—say, so you can watch Netflix or Twitter while you write articles, or so you can play Skyrim on a 60-inch screen—then an HDTV can be a very capable (and cool!) monitor replacement. Bonus points if you happen to have an extra HDTV lying around, or if you can pick one up for dirt cheap.

Note: When you purchase something after clicking links in our articles, we may earn a small commission. Read our affiliate link policy for more details.

Sarah is a freelance writer and editor based in Los Angeles. She has a love/hate relationship with social media and a bad habit of describing technology as “sexy.”

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