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Tax.appeal.168, Tax Accountant
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If you have an LLC in Phoenix and live in California would

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If you have an LLC in Phoenix and live in California would you pay taxes in both states?
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In brief, the state of California taxes the residents on their worldwide income. Sole proprietorships, partnerships, LLCs and S corporations are pass-through entities for federal income tax purposes. And as an LLC is a Pass through entity, this means that this type of entity is not subject to income tax. Rather, the owner(s) are directly taxed individually on the income, taking into account their share of the profits and losses, which is shown on their Form 1040. There is NO double taxation. As you are a resident of California, you will complete two state tax returns, one for AZ, and the other for California. On the California return you will list yourself as a resident, and on the Phoenix return, you will list yourself as a non-resident. Taxes applied by the state of AZ will be credited by the state of California.
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