I am a small business owner in TN. We do mostly technology consulting but also do some STEM type classes for kids. My wife, under the company's name, has been doing some work in AL, for a STEM class she is teaching there. Do I need to setup a separate tax item for this work, even if we are not collecting taxes, since this is a service.
For all my TN work I just charge a flat rate hourly and pay the business taxes and federal income taxes as necessary. Can anyone tell me if I need to do anything special? Do I need to file my business in AL and show the income separately, etc.
I can help share some information about multi-state withholding responsibilities.
There are some cases that there are reciprocal agreements between states that would require to only pay income tax to one of the two states. To ensure your withholding responsibility, I'd recommend contacting your State or the IRS to verify if you need to file the income tax separately.