1099 Income in WA (sales, buying, sales tax)

[PhxNative09]

Wondering how 1099 income is taxed in WA. I heard there are complicated rules for the self-employed, but "self-employed" can mean a lot of things. If I live in WA and all of my income is 1099 from AZ, does anyone know how the taxes are figured? I'm guessing living in WA is preferable to Oregon's straight 9%, but I want to make sure I'm not going to be taxed as a business.

Thanks!

[j_k_k]

Originally Posted by PhxNative09

Wondering how 1099 income is taxed in WA. I heard there are complicated rules for the self-employed, but "self-employed" can mean a lot of things. If I live in WA and all of my income is 1099 from AZ, does anyone know how the taxes are figured? I'm guessing living in WA is preferable to Oregon's straight 9%, but I want to make sure I'm not going to be taxed as a business.

Washington doesn't have a state income tax, just a hefty sales tax. If all your income is from business in Arizona, Washington doesn't care what you do there. If you do business in Washington, of course, you'll have to file for a UBI number and pay B&O tax on it.

Federal tax, of course, is Federal tax wherever you go. However, one nice thing about living in Washington nowadays is that we can finally take a Federal deduction (estimated sales tax based on our overall income, or actually tabulating sales tax paid; by and large, it means that in years you buy something like a car, you should keep and tabulate your receipts).

[PhxNative09]

Originally Posted by j_k_k

Washington doesn't have a state income tax, just a hefty sales tax. If all your income is from business in Arizona, Washington doesn't care what you do there. If you do business in Washington, of course, you'll have to file for a UBI number and pay B&O tax on it.

Federal tax, of course, is Federal tax wherever you go. However, one nice thing about living in Washington nowadays is that we can finally take a Federal deduction (estimated sales tax based on our overall income, or actually tabulating sales tax paid; by and large, it means that in years you buy something like a car, you should keep and tabulate your receipts).

So living in Washington and performing work in Washington for an Arizona company doesn't count as doing business in Washington?

Originally Posted by j_k_k

If you do business in Washington, of course, you'll have to file for a UBI number and pay B&O tax on it.

Okay, this is probably the part I was hearing about... suppose I start doing 1099 contract work for local Washington companies - anyone know where I can find a primer on how that works out? Anyone know of a way to compute the "effective %" tax rate?

[j_k_k]

Originally Posted by PhxNative09

So living in Washington and performing work in Washington for an Arizona company doesn't count as doing business in Washington?

Okay, this is probably the part I was hearing about... suppose I start doing 1099 contract work for local Washington companies - anyone know where I can find a primer on how that works out? Anyone know of a way to compute the "effective %" tax rate?

It's either Arizona income or it's Washington income. I thought you meant it was 1099 income from Arizona. I myself get 1099 income from writing, paid by a Chicago company. I do the writing in Washington. So far as I'm aware, Washington doesn't care. And Illinois doesn't seem to, either. But Uncle Sugar definitely wants (and gets) his self-employment tax. My CPA explains that everyone is expected to have a job, and this is mine, and since I'm not selling goods that require sales tax collection, just services to an Illinois company, that's considered akin to wages.

I have no idea on the effective tax rate thing. Since there is no income tax in Washington, and I don't think there ever has been, we've never been confronted with that. But if you run a business here, you are supposed to report your business income. I used to run a service business in Washington, but there was no B&O or sales tax due, because there wasn't sales tax on services like mine, and I sold no material goods; I think I was below the threshold of owing B&O tax, probably because I tried to arrange not to have too much taxable profit.

I'm not a CPA or even close to one. For finer points, I'd consult a Washington CPA.

[509]

Originally Posted by j_k_k

. I used to run a service business in Washington, but there was no B&O or sales tax due, because there wasn't sales tax on services like mine, and I sold no material goods; I think I was below the threshold of owing B&O tax, probably because I tried to arrange not to have too much taxable profit.

I'm not a CPA or even close to one. For finer points, I'd consult a Washington CPA.

You might want to consult your CPA. B&O is a tax on gross, not net!! That is why businesses hate it. No place to hide money by buying Seahawk tickets or new cars.

There is a threshold amount for B&O that you might be under.

[j_k_k]

Originally Posted by 509

You might want to consult your CPA. B&O is a tax on gross, not net!! That is why businesses hate it. No place to hide money by buying Seahawk tickets or new cars.

There is a threshold amount for B&O that you might be under.

I think it's just that my memory is hazy. It mattered for Federal purposes. I never cleared whatever threshold there was, so I never owed. (Obviously the business was not exactly a smashing success.)

[yukiko11]

If you are in WA you are subject to Excise (B & O) tax. The rate varies depending on the type of business you are in.
You can look at the rules on the WA Dept of Revenue Site.

[Michi_B]

I believe yukiko is right. It doesn't matter that the 1099 income is from another state. If you live in Washington while you do the work, you owe B&O tax to Washington. I checked into it through the Dept of Revenue because I plan to move to Washington next year and I already work as a freelance writer, exclusively through the Internet. They didn't seem to care where my income came from - just that I was writing in their state. Sigh.

Originally Posted by yukiko11

If you are in WA you are subject to Excise (B & O) tax. The rate varies depending on the type of business you are in.
You can look at the rules on the WA Dept of Revenue Site.