Today TaxMama hears from Bruce in the TaxQuips Forum with this hopeful question.
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“I have a sole proprietorship based in CA. During 2010 one of my customers was located in Texas and I traveled to Texas to provide services. Should I report the income I earned from the customer in Texas with California or Texas or Both?”
Hi Bruce,
Boy do I have great news for you!
Texas does not have an income tax. So you only need to report the income in California. Only one state tax return.
See, that was easy.
As a California resident, ALWAYS report all income, from everywhere, on your California tax return.
In fact, wherever you live, you always have to report all income from everywhere on the tax return of any state where you are a resident. You can’t just avoid paying taxes on some of your income because you were lucky enough to work in a tax-free state for a few months. Good try, though.
And just wait. With Governor Brown having just been sworn in – we can expect more taxes here very soon.
And remember, you can find answers to all kinds of questions about multi-state income, and other tax issues, free. Where? Where else? At www.TaxMama.com.
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