Tax questions about IC status for an out-of-state employer

• O-Trap

  

  I am contemplating taking a position with a California-based company. I'd be an IC and would do all my work from my home office in Ohio. However, I'm not sure how that would play out for tax purpose.
  
  Say I were making a nice round salary of $10,000 a year, if examples are needed to explain any of it. Are there any tax experts on here that might be able to shed some light on what states and cities I would be paying taxes to? I did some Google searching, but I didn't see anything that cleared it up that well.
  
  Thanks.
• SportsAndLady

  

  Tax question about IC status for an out of state company, and you come to the OC?
  
  Pay up and talk to an attorney man.
• O-Trap

  

  SportsAndLady;1790572 wrote:Tax question about IC status for an out of state company, and you come to the OC?
  
  Pay up and talk to an attorney man.

  If it becomes that much of an issue, I will. However, if it's something that can be explained relatively simply be someone who understands the rules, I don't see why it would be so unreasonable to ask.
• iclfan2

  

  You don't need to talk to an attorney, any tax cpa would do.
  
  Not a professional, but I would imagine since you are, by definition, an independent contractor and getting 1099'd that you would only pay taxes in the state that you live or are a resident (and where the income was earned, if you traveled to California to do work, then you would possibly owe a little state tax there as well). If you are unfamiliar with IC, there are a lot of other tax implications, since no one does any withholding. It would definitely be worth it to sit down with a tax professional, and probably would not cost you anything, or promise to have them do your tax return next year or something.
  
  
  Sent from my iPhone using Tapatalk
• ZWICK 4 PREZ

  

  simple answer is move to California.
• gut

  You pay taxes based on where your butt is physically sitting when you do the work. If you visit parents in Idaho, and work from their home, you owe Idaho taxes (but states have qualifications, anywhere from 3-30 days work before they want money).
  
  And as 1099, you will need to make quarterly estimated payments to the state and feds.
• O-Trap

  

  ZWICK 4 PREZ;1790608 wrote:simple answer is move to California.

  I'm from there originally, but I really don't have that much desire to move back. If I want to live somewhere with weather that nice, I'd probably move out of the country.
  

  gut;1790610 wrote:You pay taxes based on where your butt is physically sitting when you do the work. If you visit parents in Idaho, and work from their home, you owe Idaho taxes (but states have qualifications, anywhere from 3-30 days work before they want money).

  This is good to know. Thanks!
• QuakerOats

  You will be asked to complete Form W-9 first, which relates to backup withholding. At the end of the day you will owe federal income tax on the earnings (or a portion thereof), as well as self-employment tax (ugh). As for state income tax, you should only be liable for Ohio income tax, but always beware of the potentially long-reaching tentacles of California taxing authorities.
  
  As for Zwick's 'advice'; never do that!
• OSH

  

  gut;1790610 wrote:You pay taxes based on where your butt is physically sitting when you do the work. If you visit parents in Idaho, and work from their home, you owe Idaho taxes (but states have qualifications, anywhere from 3-30 days work before they want money).

  This is it. I have been an IC for several summers. Sometimes I've had 3-4 states to pay taxes in.
  
  It's not complicated in doing the taxes from that. Just sucks when you have to file all the separate state taxes -- depending on service used to file taxes, each state costs the same and just means more pay to file each state tax filing.
  
  This is how professional sports operate. Doesn't matter if they play for Cleveland, their paycheck is taxed depending on what state they are playing in.