INC S-corp In Home State Or Foreign State
In the conversation of strategy, what would be ideal as far the best TAX treatment?
So am I to understand that no matter where I claim personal res. nor where my J.O.B. is in VA/MD/DC, the only thing that is looked at is where the income is generated by my corp?
And no matter whether my corp is home state in VA and filed as foriegn in MD
or just homestated in MD I'm only going to pay taxes in the state where biz is transacted?
And later when I am transacting biz in both states, will I then only be responsible for taxation on biz transacted in that particular state, regardless of other income in the other state? This sounds way to logical.
Metro
If you incorporate in VA, then VA will tax your total income -- regardless of the state where the income is earned.
If you conduct business in MD as a foreign corporation, then MD will tax your corporate income earned in their state.
VA gives you a tax credit for the taxes paid to MD on income earned in MD.
Thanks Dave,
I assume it works the same way If homestated in MD and file as foreign in VA? Is this the general rule for states, or is this type of thing differant for every state?
Metro
General rule.
You have to pay the yearly incorporation fee in BOTH states.
Out of curiosity why do you want to inc in BOTH states?
Metro,
As a general rule, yes. The states may vary on what income from "foreign" sources is taxable.
Mr. Mike,
You only incorporate in one state. For all the other states in which you conduct business, you register as a foreign corporation. The registration fees may in fact be the same for a foreign corporation as they are for a domestic corporation.