If I have a full-time job in one state but own an LLC in another, where is my income taxed?

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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 9 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.


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