Hello!
I am considering performing either contract or part-time employment with an employer in a different state (KY). I currently work full-time, remotely, in FL.
I believe because my residence is in FL that contracting will be my only option (due to employer rules on hiring out of state).
To contract, I believe I’d have to be a sole proprietor (I think) and submit a bid, etc.
I don’t need to do this financially - and am going to move to KY in the next year (making part time employment possible instead of contracting). In other words, I could just… wait or not do this at all. My main goal here is just to make some extra money - but if taxes or something was going to make me miserable then I can just not do this.
Questions:
- What effect would contracting in a different state have on my taxes?
- Should I just wait til I move to KY and try to go the part-time employment option instead of dealing with the sole proprietorship?
- Any other advice / thoughts you have?
Appreciate the response even if it might be bullshit ;)
You have mostly confirmed what my research online has found… which helps me at least feel confident in the steps I’d need to take.
Talking to a professional sounds like a smart idea.
Fwiw I’ve done contract work and I didn’t need to be a sole proprietor or an LLC or a passthrough or anything, they just 1099’d me and I paid my own quarterly estimated taxes to the federal govt and my state of residence. I have seen places where you need to be an LLC and submit bids and all that, but that was company policy not a tax law.
Tax-wise, the instant you earn contracting income you are a sole proprietor. There is no additional step required.