Q: Consulting project coming up, corporation registered in WA, living in CA, how to save tax?
I have registered a corporation in WA (C-CORP). I have a consulting project coming up. I tried to use the WA corporation to do the consulting because the consulting fee is not taxable in WA. The consulting project is to help a bank in California but it will be done remotely---I do not need to visit the bank. Problem is, my driver's license is in CA and I am spending some time with my family in California. I have no other income this year. How to count this income as income in WA so that I do not need to pay state tax?
A:
California residency for tax purposes is complex and based on facts and circumstances. As a rule of thumb, FTB auditor may review the flowing factors, among others, to consider one’s residency:
1- Amount of time you spend in California versus outside California.
2- Location of your family/spouse/RDP/children.
3- Location of your principal residence.
4- State that issued your driver’s license.
5- State where your vehicles are registered.
6- State where you maintain your professional licenses.
7- State where you are registered to vote.
8- Location of the banks where you maintain accounts.
9- The origination points of your financial transactions.
10- Location of your medical professionals and healthcare providers (doctors, dentists etc.), accountants, and attorneys.
11- Location of your social ties, such as your place of worship, professional associations, or social and country clubs of which you are a member.
12- Location of your real property and investments (amount of investment income in California).
13- Permanence of your work assignments in California
I hope this helps and Good luck. Zaher Fallahi, Esq, CPA (CA &D.C.).
Disclaimer: This is for information purposes, not intended for, and may not be construed, as legal or tax advice. For specific advice please consult your legal counsel.
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