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General Discussion

Bobby Martin
Bobby Martin
8,624 Points

Independent Contractor tax help

Hey all, So I'm an independent contractor for two different companies that are in the same state, but not the state that I live in. I was wondering, if they are in the same state, for example California, do I need to file taxes for California? Or since I live in Oregon, and Oregon has different tax laws about independent contractors, do I need to file for Oregon.

4 Answers

jason chan
jason chan
31,008 Points

We would not be able to answer that question for you. I recommend you talk to a CPA or Tax lawyer. If we answer we are not legally liable.

US taxcode is very complicated.

Ken Alger
STAFF
Ken Alger
Treehouse Teacher

Bobby;

I will reiterate what jason chan said about talking with a CPA or tax attorney. The out of state income aspect of things can really complicate matters depending on the states involved.

Ken

I recommend you speak with a CPA. However, as somebody who has been consulting for a number of years, it depends on the state. Some states have reciprocal agreements, meaning that you don't have to pay taxes in the other state. Without knowing which states you are referring to, I can't answer specifically. If there is no reciprocal agreement, then yes, you will need to pay taxes to the state you are working in, as well as taxes in the state you reside. You will need to file a resident tax return for your home state as well as a non-resident tax return for the state you work in.

Now, this also depends how you are paid. If you are a 1099 or Corp-to-Corp worker, then you can invoice the company for your time and would only have to file in your home state as you are a company simply doing business in another state. If you are a W2 worker for these companies, then the above paragraph applies.

I always recommend a Corp-To-Corp agreement if you are consulting, and make sure you incorporate as an LLC and an S-Corp.

The information/answer is not, nor is it intended to be, legal or tax advice. Consult an attorney or accountant regarding your individual situation.

Bobby Martin
Bobby Martin
8,624 Points

I appreciate the guidance. I am actively searching for a CPA in my area. Thank you :)