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Taxes in multiple states

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Freelancer
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Taxes in multiple states  Reply with quote  

I'm a freelance editor, and I just got a new gig. However, the company told me today that they made a mistake and that they're not legally allowed to contract people who live in New York State. They said they'd make an exception, since it was their fault, as long as I can have my checks mailed out of state and submit a W9 in that state. I could have my checks mailed to my brother in Maryland with no problem, but I'm concerned and confused about the tax situation that would put me in. If I make over a certain amount (which I probably would), I'd have to file for income in both states, correct? I'm wondering how much of a hassle this will turn out to be. Also, I'm concerned that it might shoot up some red flags to the IRS. Does filing a W9 with a different state mean I'm saying that I actually live there?

Paperwork hassle is one thing. IRS red-flag hassle is a completely different matter. Thanks for any help/advice you can give!

--Amanda
Post Mon Oct 10, 2005 2:30 pm
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Rolo
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This doesn't sound right at all.

AFAIK, a business pays sales tax in the state(s) in which it has a facility where transactions are conducted (an office, POS, etc.).

State income tax? Only if it was made within the state in which you are a resident. I am a Floridian (no state income tax) and any contractor income I make in Colorado is not subject to state income tax.

If you are working in NY for a company in MD...hmmm...I don't see why they have to do anything...turn withholding off since you are not a MD resident and leave the NY taxes up to you.

"Expect me when you see me."
Post Mon Oct 10, 2005 3:23 pm
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Freelancer
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I think I might just tell them to forget it. It makes me a little nervous that they're suggesting I fabricate a residence address. It'd be good money, but not worth messing with the IRS.
Post Mon Oct 10, 2005 3:25 pm
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Rolo
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Yes, doing that and you'd be paying MD taxes and NY may want their taxes, too.

I wouldn't give up, though, Google around.

"Expect me when you see me."
Post Mon Oct 10, 2005 3:54 pm
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utrnewsletter
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be carefull or the irs will be coming after you
Post Mon Oct 10, 2005 5:23 pm
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