All You Need To Know About Multi-State Income Taxes

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Expanding into another state can improve your bottom line and boost the growth of your business. It also holds lucrative potential for employees earning outside their resident state as it holds the possibility of lower taxes and expenses for an individual.

Our expert team and comprehensive services will give you peace of mind when expanding into other states, so you can feel excited about growing your business, not worried about regulatory issues. Our CPA’s have specialist knowledge about all the in’s and out’s of multi-state expansion and are uniquely positioned to help you take advantage of the tax benefits available.

But, what are the true tax considerations when doing business in another state, and what should be considered from a business and individual standpoint? We look into the implications of these.

Understanding Business Climate and Tax Implications of Other States

For businesses: If you’ve recently expanded into another state, or considering doing so, it is necessary to look into the business climate of that state as well as consider the various tax consequences and federal filings required by that state. Addressing these challenges early in the expansion process can help avoid penalties and fees for late filings and underpaid taxes.

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For individuals: With remote work becoming the new normal in the United States, it is not uncommon for individuals to move to lower-tax states in the hopes of saving money. It is also becoming more possible for individuals to derive income from another state without ever leaving their home state. While employees may think that they are saving on taxes, this may not always be the case as each state has varying tax requirements and in some cases may experience the burden of double taxation.

Moving from one state to another can present challenges for both businesses and individuals. There are multiple tax obligations that need to be addressed in order for the transition to be successful. Working with a trusted CPA can help both businesses and individuals take this route successfully.

A good starting point for both individuals and businesses who want to understand their tax obligations in other states is to study tax apportionment rules within the state. Apportionment rules allow you to establish the percentage of your business’ profits that is subject to the tax laws of the different states within which it operates.

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We have an easy 4 steps process for your taxes:

Firstly, upload your tax info to our platform. Our advanced security protocols guarantee complete confidentiality and safety.

Our business tax experts are specifically matched to your individual requirements, ensuring that you receive personalized attention and advice.

Get expert guidance whenever you need it, whether it’s about tax planning or return inquiries. Our specialists are always available to assist you.

Tax preparation can be complicated, but we’re here to help. Our tax experts will review and confirm the accuracy of your return before filing to ensure it’s error-free

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Cost of Performance vs. Market-Based Tax Apportionment, Explained

When your corporation does business in states other than the one where it is incorporated, it may influence state and local taxes.

Apportionment refers to the division of business income among states by the use of an apportionment formula. Allocation refers to the assignment of non-business income to a particular state.

Understanding how apportionment works so that you can accurately report earnings to the IRS and local governments is crucial for corporations that operate in multiple states. It is important to understand which additional taxes apply, or you may find yourself paying double tax on some of those earnings.

Software that can help you track your residency days per state

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Multi-State Tax Filing Requirements Guide

We have put together a guide with key US State Income Taxes and highlighting each State’s Cost of Performance Matrix.

Multi-State Taxes

Find out more about tax business climate and tax requirements when doing business in the following states

Arizona

California

Colorado

Florida

Georgia

Illinois

Louisiana

Massachusetts

Michigan

Montana

New York

North Carolina

Pennsylvania

Tennessee

Texas

Washington

We can help you make sense of your interstate tax obligations

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We work with clients in diverse industries, but what they all have in common is that they have followed our proven process to reach their goals.

Our team will address any accounting clean-up tasks that need to be executed and analyze your accounting ecosystem for optimization opportunities and to stabilize your business.

We analyze your accounting to see where you can save with strategic tax planning. We don’t just put out the fire, but also streamline your tax deductions.

We’ve had great success with the business management system, and we love providing our clients with CFO advisory to reach their unique goals.

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