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malcook
Level 2

I file schedule-C for a business run out my KS home. I get 1099-misc income for day assignments in both KS and MO. Can I pay just KS tax, or must I apportion income?

The business is language translation services.  The home-state of the companies issuing the 1099s are varied.  I assume I don't owe taxes in those state.

I have been filing both MO and KS in years past, but have been advised I am in error and should just file in KS.

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Accepted Solutions
RichardG
New Member

I file schedule-C for a business run out my KS home. I get 1099-misc income for day assignments in both KS and MO. Can I pay just KS tax, or must I apportion income?

You should file a state tax return for each state where you perform a substantial amount of work.  If you regularly work in Missouri, you should file a nonresident return for that state.  It's not relevant where the headquarters of the companies that hire you are located.  What matters is where you are located physically when you perform translation services.

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3 Replies
RichardG
New Member

I file schedule-C for a business run out my KS home. I get 1099-misc income for day assignments in both KS and MO. Can I pay just KS tax, or must I apportion income?

You should file a state tax return for each state where you perform a substantial amount of work.  If you regularly work in Missouri, you should file a nonresident return for that state.  It's not relevant where the headquarters of the companies that hire you are located.  What matters is where you are located physically when you perform translation services.

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malcook
Level 2

I file schedule-C for a business run out my KS home. I get 1099-misc income for day assignments in both KS and MO. Can I pay just KS tax, or must I apportion income?

Thanks!  I think you must be right, but, I also posed the question to MO dept revenue and got a different answer!?!  What do you think of the exchange below, starting with my question:

My wife and I are Kansas (KS) residents and live near the Missouri (MO) border.
 
My wife runs a business out of our KS home; she is self-employed contractor.  She performs freelance language translation services (mostly Spanish/English).  She works both at home and at client's sites.  She claims home-office deductions and travel deductions for business use of car.
 
She gets sub-contracting assignments from various companies based in WI, FL, CO and even MO.  She receives 1099-MISC from these companies.  Some of these assignments have her crossing the state line for part of the day into MO.
 
We have in past years apportioned/ the fraction of the 1099-MISC amounts that were performed in MO as "MO source income", regardless of either the state of the contracting agency, or our home state.
 
Have we been correct in apportioning our taxes like this?  
 
We have been advised by others in similar situation that this complexity is not necessary, and that we should NOT apportion this income, and instead just report it all as KS income, being the state in which she runs her business.

-----------------

Thank you for your email to the Department.
 
You would pay taxes on the entirety of your income in Kansas being a full-time resident of the State of Kansas since you do not maintain living quarters in the State of Missouri and do not spend more than 30 days of the taxable year in Missouri.  See below:
 
A resident is an individual who either 1) main­tained a domicile in Missouri or 2) did not maintain a domicile in Missouri but did have permanent living quarters and spent more than 183 days of the taxable year in Missouri.
Exception: An individual domiciled in Missouri who did not maintain permanent living quarters in Missouri, did maintain permanent living quarters elsewhere, and spent 30 days or less of the taxable year in Missouri is not a resident.
Domicile: The place an individual intends to be his or her permanent home; a place that he or she intends to return to when absent. A domicile, once established, con­tinues until the individual moves to a new location with the true intention of making his or her permanent home there. An indi­vidual can have only one domicile at a time.
 
Thank you,
 
NAME REDACTED
Missouri Department of Revenue
Technical Resolution Section
RichardG
New Member

I file schedule-C for a business run out my KS home. I get 1099-misc income for day assignments in both KS and MO. Can I pay just KS tax, or must I apportion income?

Interesting response.   It appears the magic number is 30 days a year for Missouri.  Unless your wife spends substantially more than 30 days a year working in Missouri, I would not file a tax return for that state.
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