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Independent contractor and out of state taxes

by bookgirl, Window Shopper

  • Created: April 27, 2009, 9:49 pm
  • Updated: October 17, 2012, 12:17 pm
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6 comments

For over 10 years I worked as an independent contractor selling products in the State of CA.  I worked for a publisher out of Iowa.  All sales were in my home state of CA.  I received commission from the Iowa company for the products I sold ( in CA).

 

I paid CA and Federal taxes.  Today I received a notice from the Iowa Dept of Revenue saying that I owe Iowa taxes for 2003, 2004, and 2005.

 

Is this possible???

Tags: Discuss Popular Topics, Filing and Paying Taxes
‹ taxes tax write offs ›

Comments have been locked for this thread.

MEKKMan | Window Shopper | 10/7/2012 - 5:43 am

Iowa thinks they can collect Iowa state tax on ALL your income if you worked
an hour in Iowa. They, of course, can not legally do this but they DO try. I
taught as an adjunct at an Iowa Community College five years ago. They are
still sending me Iowa income tax forms. I live in SD which has no state
income tax. I throw their forms in the trash.
Professional Web Site: http://mekk.biz

jbeidle | Contributor | 11/17/2010 - 9:23 pm

Sounds like a scam to me. If you did not live or work there you should not have to pay taxes there.
Professional Web Site: http://TaxPanningStL.com

bak | Window Shopper | 11/12/2010 - 8:25 am

P.S., the work I do is remote computer programming work.  So I really work whereever I am.  The machines I remotely work on can be in any of the above states, or several others.

bak | Window Shopper | 11/12/2010 - 8:14 am

I find the 'what state to pay' question confusing. I'm a bit nomadic. So while I have property in SD and MN, this year I lived in SD, MN, and TX (most in SD).  The company I contract to is in MN, WI, TX, and WA (HQ in WA, 'boss' in TX, my department in WI, desk in MN).  No, I'm not making this up.  How do I figure out where to pay state taxes?

taps | Window Shopper | 5/11/2009 - 10:20 pm

I've been an independent contractor, licensed stock broker and insurance agent with 1099's coming from dozens of states for 25 years. I pay federal income tax on this income and state tax in WI where my I am domiciled. If I were to try to pro rate my schedule C expenses vis a vis my 1099 income, I would be qualified for govenment work, but have no time left to actually produce..IA sent me a notice too. I'll not do business with any companies in IA, nor any states that engage in this predatory practice. Too bad for the companies...and the revenue departments in those states.

CharlotteW | Former Moderator | 4/29/2009 - 11:29 pm

Hello bookgirl, A nonresidence tax return is a tax return for a state other than your resident state. In your case it sounds like you'll need to file a nonresident state return since you earned income in Iowa while you were living in California. It is also a wise idea to check with your employer in Iowa to verify they did not accidentally withhold state tax in Iowa since you were paying tax in California. By moving your post to this board I hope tax experts will be able to advise you on additional steps. I hope this helps. Please let us know if you have additional questions.