Ask HN: What state do I pay taxes for an LLC?
A friend and I started an LLC mid last year just to release iPhone apps through. We used "The Company Corporation" so that it could be Delaware based and they would be our registered agent. We both lived in CA at the time. A few months later I moved to MA for a month and then went traveling abroad for the rest of the year. My friend hasn't been doing anything for the company, but I've put out some apps that have brought in some money, and am wondering how to handle the taxes now. It's kind of a messy situation, and all I want to do is focus on building stuff. Anyone know how to deal with this, or some resources I should look at? Thanks!
6 comments
I'm a tax accountant and the answer is incredibly simple.
1. File in the state that you incorporated your business. 2. File in the state that you are domiciled in.
The absolute answer to the letter of the law is to file short year returns for California and Mass. because anywhere you were located meant that the company was temporarily based in that state. But, realistically this is stupid and the states aren't going to really care about you because you don't make enough to be worth their time.
So there you have it.
1. File in the state that you incorporated your business. 2. File in the state that you are domiciled in.
The absolute answer to the letter of the law is to file short year returns for California and Mass. because anywhere you were located meant that the company was temporarily based in that state. But, realistically this is stupid and the states aren't going to really care about you because you don't make enough to be worth their time.
So there you have it.
Since you said "All I want to do is focus on building stuff," you should definitely try to find a local-to-you accountant or tax lawyer to help you work through the process. Your overall arrangement doesn't sound too convoluted, but you could get a real headache if you don't work through things properly.
This said, some theoretical answers to your question (I am not an attorney, and none of this is anything beyond my conjecture): http://www.irs.gov/businesses/small/article/0,,id=98277,00.h...
http://www.corp.delaware.gov/paytaxes.shtml
If you search on Bing/Blekko/Google/Wherever for 'CPA ___[your current city]____' you'll find some good resources. Well worth the investment in time.
This said, some theoretical answers to your question (I am not an attorney, and none of this is anything beyond my conjecture): http://www.irs.gov/businesses/small/article/0,,id=98277,00.h...
http://www.corp.delaware.gov/paytaxes.shtml
If you search on Bing/Blekko/Google/Wherever for 'CPA ___[your current city]____' you'll find some good resources. Well worth the investment in time.
You pay taxes wherever your tax lawyer (or possibly accountant) tells you to pay them.
It's not worth your time to try to figure this out yourself unless you're one of the crazy people (and I count myself in this group) who actually enjoy digging through the various statutes, regulations, and treaties covering such matters.
It's not worth your time to try to figure this out yourself unless you're one of the crazy people (and I count myself in this group) who actually enjoy digging through the various statutes, regulations, and treaties covering such matters.
You won't get many responses on HN because accounting is a regulated profession and you can't just post advice on a public forum.
But here is what you need to Google: "IRS pass-through entity".
But here is what you need to Google: "IRS pass-through entity".
portman is correct. he is aware of "circular 230" regulations. usually accountants wouldn't provide advice (especially written advice) because it would lead to potential liability.
I'd be interested to hear about your iphone app experience. pls pm me at lakeatsion at gmail.com
Find a local CPA and ask them.