Personal Income Tax Question: Nevada S Corporation but live in Illinois?
I'm about to incorporate my (just started), online business as a Nevada S Corporation. I live in Illinois. I work full time. My money from my full time job funds my online company. Will I be able to write off my losses (if I lose money) on my IL state and federal taxes? Will Illinois recognize that my salary from my employer is helping to fund my online business or because the corporation is in Nevada and there are no income tax in Nevada, IL will not recognize that I am using my salary to buy merchandise to sell, pay for contractors, etc. for this online only (not brick and mortar) business. Thank you.
Public Comments
- It really doesn't matter which state the S-corporation is incorporated in. The S-corp will need to file state tax returns based on where the S-corporation is headquartered, where the company books are kept, where the company assets are. As far as your individual return, as an IL resident, you are taxed on your worldwide income. That means you are subject to IL tax on your distributive share of the S-corp income. If you have a loss from the S-corp, then the loss will be deductible as a loss on your IL return.
- Who is setting up the s corop for you...they should be able to answer that question more thouroughly. I believe your will be fine. A loss is a loss is a loss. You are using an accountant arent you.. they are well worth it. Usually for small buss. the cost for tax prep is around 1k to $1500
