Tax impacts of a LLC doing business in Texas and California
We're working on starting a business under LLC that would have 1 partner in TX and 1 partner in CA. Are there any setup, tax burden and tax filing needs that differ strongly based on where it is incorporated?
Assuming that it is incorporated in Texas:
- Estimate is that profit distribution would be about 60% Texas income, 40% California income
- Is the Texan going to be responsible for any CA self-employment taxes, if above or below the CA non-resident Gross Income of ~$52k
- Is it correct that the FTB tax is charged at the company level, not individual partner level, e.g., even if incorporated in Texas, $800 will still be collected by CA FTB as long as there is a K-1 issued in CA
- Is it correct that if income is earned in other states, e.g., travelled and performed work in Virginia, there may non-resident taxes from that state if income exceeds that state's threshold
Are there any other best practices or gotchas to watch out for in this situation
Thanks! JB
