Q: Can you advise on what the tax implications might be when providing telehealth across state lines?
I'm a psychologist, in private practice, licensed in CA and Nevada, practice is in NV, want to provide telehealth in CA. Would income earned from a CA resident or a CA company (insurance) result in my paying taxes? If yes, would CA tax me on my entire NV earnings since CA des not have state income tax?
A:
When providing telehealth services across state lines, like from Nevada to California, you may face unique tax implications. If you earn income from California residents or companies, California may require you to pay taxes on that income. This is because states generally tax income earned within their jurisdiction, regardless of where the service provider is based.
However, California would not tax your entire Nevada earnings. The taxation would typically be limited to the income generated from California clients or companies. Each state has its own rules for apportioning income and calculating taxes owed by non-residents who earn income in that state.
It's also worth noting that Nevada does not have a personal income tax, which simplifies your tax situation in your home state. But for the income earned from California sources, you would need to file a non-resident tax return in California, declaring the income earned from those sources.
Given the complexities of state tax laws and the nuances of telehealth, it's advisable to consult with a tax professional who has expertise in multi-state taxation. They can provide guidance tailored to your specific situation, ensuring that you comply with all relevant tax laws and minimize your tax liabilities. Remember, careful planning and accurate tax filing are essential to avoid any legal or financial complications.
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