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Level 3
posted Mar 22, 2025 9:50:34 AM

Filing Order of State Taxes With an LLC Out of State

Hello. I hope you are doing well. Thank you for taking the time to read my post and answering the question if you can. Here we go.

 

I am a partner to an LLC in Massachusetts that buys, sells, and lease properties. Though I live in California. I'm not a silent partner and do what I can from where I'm located. The LLC purchased a property in Rhode Island and has tenants. Which is the next city over from Massachusetts. I have completed the business tax using TurboTax Business (Form 1065) and issued out the Schedule K-1 (Form 1065) that were developed. Now I'm in the process of completing my personal taxes. Here are the questions I have.

 

  1. As you can see, money is flowing through 3 states. It starts in Rhode Island getting the rent from tenants. Then the money goes through the LLC in Massachusetts. Lastly it goes to the partners and I'm in California. I've read in this community that doing certain states first in TurboTax can trigger credits and so forth. If that is true, after doing the federal portion of my personal taxes in TurboTax, which state should I do first, second, and last? Once again, the money is received in Rhode Island first, goes to the LLC in Massachusetts second, and lastly come to me in California.

Thank you for your time and help.

0 2 1965
1 Best answer
Expert Alumni
Mar 23, 2025 12:40:06 PM

Work on your state returns in the same order as the income flows. If the Schedule K-1 reports income sourced in RI, complete that state first. Then work on MA, since that is where the LLC is registered. Then complete your resident California state return last.

2 Replies
Expert Alumni
Mar 23, 2025 12:40:06 PM

Work on your state returns in the same order as the income flows. If the Schedule K-1 reports income sourced in RI, complete that state first. Then work on MA, since that is where the LLC is registered. Then complete your resident California state return last.

Level 3
Mar 23, 2025 1:08:27 PM

PatriciaV,

 

Hello there. Thank you for replying back. I had that concept in my mind, but wasn’t sure. So, in the order of the flow of the money. I like that. It’s a great reminder for those who didn’t know or have a hard time remembering. Thank you for that information and your time.