I have a 1099-MISC form that includes income from multiple states - how do I break it down?

[hduncan25]

I started working as a locum tenens physician assistant last year in February. I have a W-2 from my last permanent position, which ended in February, then a 1099-MISC form that is one lump sum from the three consulting positions I held in two different states (MA and CA). I don't want to enter it as one lump sum, because I don't want to pay MA taxes on all of my income. Do I enter these as separate businesses? All of the money was paid to me directly, as I did all of my work through one agency. I also need to know where to add my per diem expenses for each separate job.

[DianeW]

It is actually one business with many locations.  The income would normally be entered on one business (Schedule C) then when you get to the state returns, as long as you enter the months of residency you should be able to allocate the net profit to the appropriate states.

It may be easier to enter two separate businesses to keep the profits separate and if the income is all reported and reflected accurately, there's no reason you couldn't choose this option. This will allow you to allocate your expenses to each portion of income as you need to under business expenses.

File a part year resident state return for each, the first thing you want to do is make sure you've filled out the Personal Info section correctly:

1. With your return open, click the first tab, Personal Info.
2. Continue to the Your Personal Info Summary screen.
3. Scroll down to the last section, Other State Income, and click Edit.
4. At the Did you make money in any other states? question, answer Yes and make sure your part year resident state(s) are selected from the drop-down.
5. Click Continue to return to the Your Personal Info Summary screen.
6. Next, select the State Taxes tab and check your residency status, change if necessary
7. Lastly, double check the W2s to make sure the correct two letter state code is in box 15.

This should allow you to allocate correctly so that only your income earned during your residency period is taxed on each state return. Carefully review any income allocations when checking the state return.  

Begin your business income entry using the steps below.  The Form 1099-MISC is not required to be entered in document form, you can split the income for each business and retain the form in your tax records as proof of reporting the income.

1. Select the Federal taxes tab (Business tab in TurboTax Self Employed Online or TurboTax Home & Biz Desktop)
2. Select Wages & Income (Business Income and Expenses in Self Employed Online or TurboTax Home & Biz Desktop)
3. Update/Edit or Add another business