What should I know about taxes as a salaried, traveling consultant?
June 2, 2010 5:46 AM   Subscribe

How do I claim taxes working as a salaried IT consultant? I have a client in another state that I travel to on a weekly basis.

I realize that basing my financial decisions solely off of internet feedback probably isn't the best practice. I do plan on speaking with a tax professional at some point in the near future. I'm seeking information so I won't be completely ignorant when those talks start.

I am a full-time, salaried IT consultant with the ability to live anywhere in the US as long as there is an airport near by. I have one client at a time and travel Monday-Thursday to and from their site. As mentioned above, I don't live in the same state as my current client.

When I filled out all of the tax forms, I was told to choose my home state. I just received my first paycheck since being employed and noticed that under the section of 'Exemptions/Allowances' I have Federal and GA (my client's state). My home state is not listed.

This being my first traveling consulting role, I now realize that taxes may require a different setup than what was originally presented to me. Any suggestions, guidance, or advice is appreciated and will help me better understand the situation when I speak with a tax professional.
posted by jwfree to Work & Money (2 answers total)
AFAIK, generally you end filing taxes in both states (one as resident - one as a non-resident) and you claim the taxes paid in the non-resident state in your resident state. This should usually end up as a wash.

Talk to your payroll provider and accountant for more details - they can vary based on the two states involved.
posted by bitdamaged at 8:27 AM on June 2, 2010

I used to do this as a full-time salaried IT consultant, except I'd work in 10-12 states per year. You will have to file a non-resident state return for the state you do not live in, and then file a resident state return for the state you live in. You do claim the taxes paid to the other state on your home state's return, and it usually does end up being a wash unless their tax rates are very different. I'd have an accountant do it for you, since many of the tax programs available don't handle this all that well (in my experience, anyway).
posted by bedhead at 12:54 PM on June 2, 2010

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