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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I have an LLC (1 manager) that is registered in Delaware. I ...

Customer Question

I have an LLC (1 manager) that is registered in Delaware. I am a resident of the state of California, and I am a student in Pittsburgh, PA. I already know the federal tax forms that i have to file. I was wondering what state tax forms do i have to file. I have earned income in Pittsburgh from a job at the university. The business is an online business. Do I have to get a business license in a city/county? Since it is online, I am not sure where I actually need to get the business license. It seems like the taxes would be a lot easier if i got the business license in Pittsburgh because I wouldn't have to declare any income for California. If I do make the business license (and am required to) in PA, would I have to file any forms in CA, and which forms do i have to file in PA? If i end up doing it in CA, which forms do i have to file in CA, and which in PA?
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.

If you operate your online business from location in PA - the income that your business generated is considered an income from PA sources and taxable for PA.

Next - you need to determine your residency status for PA and CA.

  • If you are a resident of PA - you do not need to file a CA tax return, but should file your PA tax return as a resident.
  • If you are a resident of CA - you need to file PA tax return as a non-resident and a CA tax return as a resident. All your income will be taxable for CA regardless its source. On your CA tax return you may claim a credit for taxes paid in PA.

If you are asking for 2007 here are forms to use:

Customer: replied 6 years ago.
The problem is, I operate it from PA, and from CA (CA in summer and on vacations, PA during school year). Do I have to separate them? Does it matter where I actually do the work?

I am a resident in CA as I am claimed as a dependent there.

thanks
Customer: replied 6 years ago.
Reply to LEV's Post: And, for the 2007, where would i claim credit for taxes paid in PA on the ca form 540.
Expert:  Lev replied 6 years ago.

The income you earned while physically located in PA - is the income from PA sources; the income you earned while physically located in CA - is the income from CA sources.

As you are a non-resident of PA - only your income from PA sources is taxable on your PA income tax return. You should include the income from a job at the university and prorated part of your business income.

As you are a resident of CA - all your income regardless its source is taxable on CA income tax return. To determine the CA credit - use the form S - 2007 Other State Tax Credit - http://www.ftb.ca.gov/forms/07_forms/07_540s.pdf - scroll down for instructions.

 

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