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Lev
Lev, Tax Advisor
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Experience:  Taxes, Immigration, Labor Relations
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I recently created a Delaware S Corp. I work independently

Resolved Question:

I recently created a Delaware S Corp. I work independently for multiple companies from multiple states doing freelance mystery shops, field inspections and tech and customer support via phone from my home in Montana. My place of residence changes every few years. All of these companies will be paying my new S-Corp. When I set up my salary, what state do I have to file taxes in? Do I need to set up a foreign entity every time I move to a different state?
Submitted: 11 months ago.
Category: Tax
Expert:  Lev replied 11 months ago.

LEV :

Hi and welcome to Just Answer!
If you physically work in different states - you will need to account separately for wages paid to you for services provided in each state.

LEV :

Whether you need to register your S-corporation as a foreign entity - depends on the law of that specific state. Most states do require a foreign (out of state) entity to be registered.
In additional - you need to consider your home state. Thus - your wages are taxable in Montana.

Customer:

So will I need to do the Foreign Entity thing here in Montana if I am doing most of my work from home?

Customer:

ok. Thanks.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22615
Experience: Taxes, Immigration, Labor Relations
Lev and 9 other Tax Specialists are ready to help you
Expert:  Lev replied 11 months ago.
Income tax liability on state level is based on both - your residency and on the source of income.
Thus - if you physically perform work in any specific state - the compensation for that work is income from sources within that state - and as such might be taxable for that state.
If however you are calling a customer out of your Montana home - that is income from Montana sources regardless of the customer's location.

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