Tax Question: I got paid to be a speaker at a conference in another state. The organization made me...?

Question

fill out all kinds of tax forms, where I had to essentially say that I was an independent contractor performing a service for them, etc. All the forms were properly filled out and given to the organization, so presumably they will report my earnings to the Feds. No problem... My question is - will they also report my earnings to the state? (West Virginia) And if so, do I need to fill out a tax return for that state, even though I don't live there? Or should I report the income to the state in which I live?

Also, should I claim my mileage that I drove to get to the conference and back?

I will get a 1099...

Answer 1

Whether you need to report in West Virginia is dependent on the amount you were paid and how much in expenses you claim. If the net amount is small (under $500 or so) most tax preparers will not feel the need to file in that state. This is an issue for musicians, comics, and athletes who are paid in various states in any given year. People who invest in some types of real estate partnerships often are receiving small amounts of income from 30 or 40 states. To have to file in each state would be cost prohibitive, so only the states with a material level of income see a return.

You received a 1099 which notifies the IRS that you were paid nonemployment compensation. If you received no state form then West Virginia likely has no idea that you earned this income in their state.

Since this is your first time reporting business income I would hire someone to do this. A local CPA is always best. You will be either filing a Schedule C showing the gross income less various expenses (driving costs can be complex) or if the situation is simple enough you may just report the net as miscellaneous income subject to self employment tax. Since no payroll taxes were witheld and paid by you or the employer, you will be liable for "self-employment tax" of 15.3% on the net profit. Ideally you would have enough expenses to have no net profit, or maybe even a loss which would help reduce your taxes to an amount lower than if you had never received the income at all!

Answer 2

The organization would normally report those earnings to you, the IRS and the state in which you earned the money (West Virginia). How much that compensation is and the state in which you reside and normally pay state income taxes (if they have them) will determine how you pay taxes on that income. The form on which they report those earnings is a 1099 misc which you should recieve by January 31, 2007. On that form you will be able to determine if they reported the income to WV. The stte of WV "requires nonresidence to file a return regardless of the income amount. If this is the only 1099 misc income you recieved and it is not a great deal of income you can make it go away with expenses against that income including your travel cost to get to the event. There are other expenses, some of which you may not be aware of, and you should be able to reduce that to at least zero. With that accomplished you are almost out of the woods. The state of WV will see the 1099 misc and want to know where their cut is. since you should have filed a return in WV they may send you a letter demanding their tax. In that case you send them a copy of your Schedule C from your federal return in which you had zero income and they should leave you alone as they know that there is no money to levy tax against.
Now you should not try this at home and alone! Go see a tax professional and pay them $300 or $400 to do what I just told you.

Answer 3

The taxes ask if you worked or lived in another state and yes, you will pay those taxes. Did they take taxes or will you get a 1099? Yes, claim your mileage to and from and let a professional prepare your tax so that you know it's done correctly!

Answer 4

You only pay the state income tax in your state. On the form, you should be able to specify which state you reside in. By all means claim every and all cost that incurred for doing the speech including mileage, meals, stationary, phone calls, etc. You can deduct from the income you receive by doing the speech.