Do I pay taxes for both state?

-I rent an apartment in PA but work remotely for TX. However, I do not file PA taxes. I still show myself as a TX resident and pay TX taxes. I have not changed my TX license to PA either. Is my employer still required to pay PA taxes? I'm not a contract worker. My employer is not registered with PA state. Their office is only in TX. My employer wants to avoid paying the extra fees that will cost them for an employing someone remoting into work. They asked me to get a d.b.a for a business so they can pay me as if they were paying a company. The business account under my dba will only be used to receive my paycheck and paying my personal bills. Can I get a dba only for these reasons? I will get the dba in Fort Bend County, TX and show that it is a home based business so that they can mail my checks to my mom's house.You must file and pay PA taxes because you work and live in PA. Even if you show yourself as a TX resident and have a TX license, you must pay taxes to the state where you work and live.



Additionally, because you moved to PA but did not change your license, you must not drive in those states that have laws saying that anyone without a license from the state where the person lives is not allowed to drive (even if the person has a license from another state).
You and your current employee are BOTH asking for some possible big problems coming in the future from the IRS with this change that you and they are planing on doing with your change in classification from an EMPLOYEE to a self employed independent contractor for this purpose and reason when you will still be doing the same job and work that were you previously doing.

Independent Contractor (Self-Employed) or Employee?

It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors.



http://www.irs.gov/businesses/small/arti鈥?/a>



And here you go using the below information should help you get started for your first year as a self employed independent contractor and as you progress and your business starts to grow you may even need some good professional assistance with it for your future.

Schedule C and the SE of the 1040 federal income tax return read each line when you start at the top of the page on the schedule C for your self employed independent contractor business operation your name is fine your social security number is fine and your present home address can all be used for this purpose just do NOT try to make it complicated and read each line and word and understand what it says and do what it says and then you should NOT have any problem.

You can also find the line by line instructions for the schedule C by using the www.irs.gov website and using the search box for the schedule C 2010 Instructions for Schedule C (2010) 2010 Table of Contents Profit or Loss from Business



http://www.irs.gov/instructions/i1040sc/鈥?/a>



Specific Instructions



http://www.irs.gov/instructions/i1040sc/鈥?/a>



BUT GOOD detailed records are really necessary for your business operation to succeed.

For your 1040 Federal income tax reporting you would use the below enclosed information for this purpose.

Use the search box at www.irs.gov for Publications and Forms for the Self-Employed



http://www.irs.gov/businesses/small/arti鈥?/a>



All of your gross income from all sources of worldwide income will be reported on your correctly completed 1040 federal income tax return.

Using a receipt book to make a receipt for each time that any one pays you in any way or item or trade for the amount of $$ value that is received at that time and totaling the gross self employed income for the tax year with any other 1099-MISC income that is received after the end of the tax year and entering the total gross $$$ value amount on the schedule C line 1 GROSS receipts from your trade or business

In general, taxpayers may deduct the ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer鈥檚 trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

You would have to be sure that you handle your business deductions correctly for your business operation.

For instructions and forms go to the IRS.gov website and use the search box for publication 334 a very good place to start with examples.

Publication 463 Travel, Entertainment, Gift, and Car Expenses

Use the search box at the www.irs.gov website for Small Business and Self-Employed Tax Center

Filing Season Central is your one stop assistance center for filing your business returns. This includes Highlights of Tax Law Changes, Tax Tips, and more.

2 of the seven tax tips for starting a business enclosed below.

Go to the IRS gov website and use the search box for the below referenced material

*Publication 4591, Small Business Federal Tax Responsibilities (PDF 470.1K)



http://www.irs.gov/



http://access.wa.gov/business/taxes.aspx



Hope that you find the above enclosed information useful for your situation and good luck to you. 07/01/2011
you don't 'get' a dba, you announce in a newspaper advertisement that you are 'doing business as' xxxx

when you apply for your business license in the community you will operate this business

declaring a dba has nothing to do with taxes

you are living in PA, you are operating this 'business' in PA, therefore you report to PA your income

if you want to establish yourself as a business, that is fine and you will report income and business expenses on Sch C, with your 1040, very likely Sch SE as well

there are no income taxes in Texas

generally in most states if you stay 10 days or more, rent a place to live, open bank accounts and otherwise establish your residency you are a citizen of that state, the DMV has just not caught up with you operating your vehicle on a Tx license
Couple things here:



If you are living and working in PA, PA might very well consider you a "resident" and expect that your driver's license be changed and you pay state taxes. A lot depends on your situation (temporary location, at school, whatever). If it turns out you are a PA resident, you will need to file PA taxes (and TX taxes too since it's a TX company).



If you are an "employee" of the company, they CANNOT pay you as a d.b.a. business. You are an employee and they are responsible for taxes, workers comp, etc. The only way they could pay you as a d.b.a. is if you were a consultant/contractor. The IRS has very specific rules on what the difference is between employees and independent contractors.



Finally, you don't need a d.b.a. - if the company wants to and can legally pay you as a contractor they can pay YOU as the contractor. You don't need to be a d.b.a. for that. HOWEVER - if they do that, YOU will then be responsible for your own self-employment tax (basically social security tax that you pay as self employed). You'd be paying twice the SSI that you are now (because your employer pays half currently). Keep that in mind - if they want you as a contractor (and do so legally), you'd want more cash since you'll be paying all your own taxes then.