Client in NYC, Employer in NJ, Self-employed


A

anand

I'm self-employed, working for my S corporation on W-2. I
live in NJ, and my corporation is set up in NJ.

My clients are in NYC, and have 1099 contracts with them.

The question is what income taxes should I pay. Because my
W-2 comes from an NJ corporation and I live in NJ should I
pay just the NJ taxes.

Pls. advice.

Thanks

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S

Seth

anand said:
I'm self-employed, working for my S corporation on W-2. I
live in NJ, and my corporation is set up in NJ.

My clients are in NYC, and have 1099 contracts with them.
Where do you physically do the work?

Seth

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<< The foregoing was not intended or written to be used, >>
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D

Dick Adams

anand said:
I'm self-employed, working for my S corporation on W-2.
I live in NJ, and my corporation is set up in NJ.
If you are doing the work in NYC, I believe you have to pay
NY taxes and get a credit on your NJ return. It makes
econonic sense that income should be taxed at the location
of the labor rather than at the residence of the laborer.

Katie, the resident authority on State taxation, is the best
person to explain the problems of a NJ S-corp doing business
on-site in NYC.

Dick

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<< The foregoing was not intended or written to be used, >>
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A

anand

Where do you physically do the work?
As an employee of my corporation, I physically work in NYC,
and as the owner of the corporation, I physically work at my
home in NJ.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
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<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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S

Seth

As an employee of my corporation, I physically work in NYC,
and as the owner of the corporation, I physically work at my
home in NJ.
Pay for the work you do in NYC is taxable by NY. I believe
that corporate profit attributable to that work is also
taxable by NY (but I don't know the details of allocation).

Seth

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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B

Benjamin Yazersky CPA

anand said:
I'm self-employed, working for my S corporation on W-2. I
live in NJ, and my corporation is set up in NJ.

My clients are in NYC, and have 1099 contracts with them.

The question is what income taxes should I pay. Because my
W-2 comes from an NJ corporation and I live in NJ should I
pay just the NJ taxes.
First of all, you are not self employed if you work for an S
corp (even if you own 100% of it). You are an employee, who
gets a W2, as you indicated above.

With regard to NYS & NYC taxation, you have to go through
their nexus rules to determine if your activities create
nexus there. It could be a different answer for you the
individual employee and the S corp, depending on the facts
and circumstances.

Sounds like you should contact your CPA/tax advisor and
explain your situation and nexus questions.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----

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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
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K

Katie

anand said:
I'm self-employed, working for my S corporation on W-2. I
live in NJ, and my corporation is set up in NJ.

My clients are in NYC, and have 1099 contracts with them.

The question is what income taxes should I pay. Because my
W-2 comes from an NJ corporation and I live in NJ should I
pay just the NJ taxes.
Since you (and by extension, your corporation) are
performing services in NY, both you as an individual and
your S corporation are subject to NY tax.

You are not self-employed; you are an employee of your
corporation. Your wages are NY source income to the extent
you perform the services to earn them in NY. NJ will give
you credit on your individual income tax return for the tax
you pay to NY on your NY earnings, limited to the proportion
of your NJ tax liability that relates to that income,

Your corporation is doing business in NY and must obtain a
certificate of authority from the NY Secretary of State, and
must register as an employer and withhold NY state income
tax on your wages for services performed there. The
corporation will be subject to the NY fixed- dollar minimum
tax, which ranges from $100 to $1,500 annually, depending on
the amount of gross payroll. (If total gross payroll is
$250,000 or less; the tax is $100; if more than $250K but
not more than $500K, it is $225.) Also, in order not to be
treated as a C corporation for NY purposes, the corporation
must make a separate S election for NY. S corporations are
not subject to a measured tax in NY after 2003.

Katie in San Diego

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
 

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