If I have a full-time job in one state but own an LLC in another, where is my income taxed?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If I have a full-time job in one state but own an LLC in another, where is my income taxed?
I have a stable salary from a large company, working a regular job in one state. To supplement my income, I have a small LLC set up in another state. I believe I need to file taxes in each state – but is my regular salary at risk for being taxed in both states? If not, how do I file the LLC income in one state, and my salary in another state? What taxes do I file and in which state? I want to be sure that my $100,000 from my job is not taxed twice. Should this be a concern?
Asked on November 8, 2011 under Business Law, Minnesota
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The way to answer your question is that if you earn all of your money in one state as an employee from that large company, you file a state income tax return in that state of employment.
If you earn a salary from your limited liability company in another state but are earning that salary in the same state where your main job is, then that income is added to the amount earned in the tax return for the state where your main job is.
As to income generated by the limited liability company in the other state, if it earns a profit then it pays state income taxes in the state where it is created and does business.
For a follow to your question, you should consult with an accountant. Good luck.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.