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oscargr0424
Returning Member

How do states know if you are working while traveling in that state

Here's the situation:

- I'm a business owner in Virginia

- I get paid by the company in Virginia (W2)

- Let's say I spent some time in Florida, most in Virginia, and a week or two in NYC

 

Currently I expect to just continue to pay Virginia taxes, but I am confused about a few things:

1) Since I worked from NYC (from my son's apartment who I was visiting and staying with) am I "supposed" to pay income tax to NY? How would NY even determine that I was required to do so?  For that matter how does any state know?

2) I am actually on a lady bird deed in Florida for my father's place. We were thinking about moving down there, but I assume we would continue to only be there 3-4 months a year. If I switch over all things (e.g., register to vote, car registration, etc) to Florida can I then not pay state tax? I assume because I'm a business owner in VA I would still have to pay VA income tax on my business income, but could I save on investment income?

2 Replies
Mike9241
Level 15

How do states know if you are working while traveling in that state

1) Since I worked from NYC (from my son's apartment who I was visiting and staying with) am I "supposed" to pay income tax to NY? How would NY even determine that I was required to do so?  For that matter how does any state know?

mostly they rely on taxpayer honesty. however, in some cases, someone using your services may issue a 1099 a copy of which would go to the state besides the IRS.  getting caught would result, as a minimum, penalties and interest besides the taxes and at the worst jail time penalties and interest.

 

 

 

2) I am actually on a lady bird deed in Florida for my father's place. We were thinking about moving down there, but I assume we would continue to only be there 3-4 months a year. If I switch over all things (e.g., register to vote, car registration, etc) to Florida can I then not pay state tax? I assume because I'm a business owner in VA I would still have to pay VA income tax on my business income, but could I save on investment income?

 

can't answer because it depends on the type of tax entity that does the business and what your business is. is it you as a sole proprietor or through a single-member LLC, S or C Corp?

Hal_Al
Level 15

How do states know if you are working while traveling in that state

Q.  Since I worked from NYC (from my son's apartment who I was visiting and staying with) am I "supposed" to pay income tax to NY? 

A.  Yes, but "nobody" does. See http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/  If you live in a state without an income tax (e.g. FL), it’s more likely you should file in the work states. You can't use the "it all comes out even" rationale for not filing.

 

Q. We were thinking about moving down to FL.  I assume we would continue to only be there 3-4 months a year.  If I switch over all things (e.g., register to vote, car registration, etc) to Florida can I then not pay state tax?

A.  No.  You would still be considered  full year VA resident, for tax purposes.  

 

 

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