caserri Posted July 16, 2013 Share Posted July 16, 2013 Because Massachusetts is not a very friendly state to start a business in, I've been forced to form my LLC in Vermont and will conduct all of my business there. My question is how do I file my state income taxes in this circumstance. The information I've found online seems to suggest that I would need to file 2 state returns. 1 for VT that includes the business income and 1 for MA that includes all my income. It is my understanding that I would be able to deduct the taxes paid to VT on my MA return although I've been unable to confirm that with the state of MA. As stated, MA is very difficult to work with and they do not provide many answers. I can't even get them to call me back. It seems pretty straightforward but my ultimate goal is to earn 100% of my income in VT and none in MA. I'm wondering how MA would handle my tax liability if I earned no money here to tax. I know I will ultimately have to consult a tax professional on this but I figured I'd ask here as well since I know there are others who run routes in states other than their home state. Link to comment Share on other sites More sharing options...
mission vending Posted July 16, 2013 Share Posted July 16, 2013 Making a assumption here but I would think your MA tax liability would be based on your federal taxable income because you live in MA. Don't think it matters what state you earn the income in. Link to comment Share on other sites More sharing options...
caserri Posted July 16, 2013 Author Share Posted July 16, 2013 I don't think it matters either. I am just wondering what MA will do when my deduction for taxes paid in VT exceeds my earnings in MA. Link to comment Share on other sites More sharing options...
treadmill Posted July 16, 2013 Share Posted July 16, 2013 When I had my routes in Florida. I ran all of my income on my MI return because that is where I resided even though I did business in Florida. This was done according to my CPA. Link to comment Share on other sites More sharing options...
caserri Posted July 16, 2013 Author Share Posted July 16, 2013 When I had my routes in Florida. I ran all of my income on my MI return because that is where I resided even though I did business in Florida. This was done according to my CPA. Yes. That's the info I was given as well. I was mistaken when I posted the last post. So did you then deduct the taxes paid to FL on your MI return? Link to comment Share on other sites More sharing options...
treadmill Posted July 16, 2013 Share Posted July 16, 2013 Florida has no state income tax. Link to comment Share on other sites More sharing options...
caserri Posted July 16, 2013 Author Share Posted July 16, 2013 Ahhh, OK. Well that would make things a lot easier! Link to comment Share on other sites More sharing options...
Makes Cents Posted July 16, 2013 Share Posted July 16, 2013 Any income generated by the LLC would be reported on the LLC taxes filed in Vermont. Any income or salary paid to you by the LLC would be reported on your personal income tax form (feds) and your state of residence taxes (Mass). I dont think you can deduct the taxes paid by the LLC in Vermont on your personal income taxes because you and the LLC are different entities. If you want to minimize your tax liability in Mass you would want to leave as much income as possible within the LLC. Link to comment Share on other sites More sharing options...
treadmill Posted July 16, 2013 Share Posted July 16, 2013 I think talking with a CPA would be your best bet. Wouldn't cost you anything for just a simple tax question. Link to comment Share on other sites More sharing options...
caserri Posted July 16, 2013 Author Share Posted July 16, 2013 I think talking with a CPA would be your best bet. Wouldn't cost you anything for just a simple tax question. As stated in my original post, that is my plan. I just wanted to pose the question here for the sake of discussion. Link to comment Share on other sites More sharing options...
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