If you are an independent contractor with a nomadic lifestyle, the issue of taxes can become murky very quickly. If you are constantly moving from one state to another, do you have to pay taxes to each state? Are you exempt from taxes all together since you aren’t actually considered a resident of anywhere?
These are good questions to be asking and are quite common. The definitive answer is, EVERYONE has a “tax home”; aka a state that can claim you as a resident, unless you live outside the US on a long-term basis.
What about those that truly no place that they call home because they are on the road 100% of the time. For independent contractors, this can (on rare occasions) be the case.
First and foremost, the instance where you don’t have any identifiable tax home is EXTREMELY RARE. Almost always, a CPA or other tax professional would be able to identify your “tax home” or primary state of residence. They would look at the state that issues your driver’s license, whether you have storage in any given state, voting registration and other indicators.
It is best to be proactive in determining your tax home, so that you may adopt the most tax advantageous state available to you. In order to do this, we recommend talking to a tax professional that can help you determine where your tax liability resides, as each situation is based on your facts and circumstances and each state uses different criteria to determine if you have “nexus” in that state.
Independent Contractor Tax Advisors knows that taxes for independent contractors are a complicated issue with many facets to consider, when determining the most tax advantageous strategy for each individual. This is why we offer a free tax consultation to help gain a better understanding of your individual situation, and to better enable us to provide the best and most informed guidance to you, for your financial future.
Contact us today to sign up for your free tax consultation and find out today how we can help you take control of your tax liabilities and save thousands in taxes.