S-corp Tax Advice Needed for Operating in Texas & Florida - Where to Run Payroll?

I set up a single-member LLC in Texas last year that's now taxed as an S-corp (just got approval for 2024). I do online tech consulting work. Here's my situation - I'm temporarily relocating to Georgia for about 6 months for an onsite client project (April through October), but my permanent home is in Texas. I have several questions I'm struggling with: 1. For payroll purposes, should I keep everything in Texas, or should I run payroll in Georgia during the months I'm working there? Which approach gives better tax advantages? 2. If I keep payroll in Texas, can I claim per diem expenses for my time in Georgia? I'll be paying rent on an apartment and have meal expenses - would these qualify as travel expenses I can deduct? 3. The apartment lease in Georgia - does it need to be under my LLC's name to deduct the rent, or can it be in my personal name? We've already signed a 6-month lease starting in April. 4. I purchased a vehicle exclusively for business use. If the deduction between standard mileage rate and actual expenses comes out roughly the same, is one method preferred? Like maybe one requires less documentation or faces less IRS scrutiny? The car is currently registered in my personal name. I'm still working virtually right now from Texas and haven't started any business activities in Georgia yet. Any advice would be super helpful!

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18 comments

Dmitry Ivanov

•8M

Based on your multi-state situation, here's what you should consider: For payroll, you should generally run it through Texas since that's your permanent business location. The state where you physically perform work matters for income tax purposes, but since both Texas and Georgia don't have state income tax, this simplifies things considerably. Keep your payroll in Texas where your business is established. Regarding per diem expenses while in Georgia, yes, you can likely claim these as travel expenses since you're temporarily away from your tax home (Texas). The IRS generally considers assignments of less than one year as temporary. You can deduct lodging, meals (subject to 50% limitation), and other travel expenses. For the apartment lease, it doesn't necessarily need to be in your LLC's name. The IRS looks at the substance of the arrangement rather than just the form. However, it would strengthen your position if the lease referenced your business purpose or if your company reimbursed you formally for these expenses. On the vehicle question, both methods have pros and cons. Standard mileage is simpler with less paperwork - you just need a mileage log. Actual expenses require more documentation (receipts for gas, maintenance, etc.) but might be better if it's an expensive vehicle with high operating costs. The standard mileage rate typically faces less scrutiny as long as you maintain a good mileage log with business purpose noted.

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Dmitry Ivanov

•8M

For per diem expenses, you have two options. You can use the GSA standard rates for lodging and meals which simplifies recordkeeping significantly - no need to keep all receipts in this case. Just document the dates and location of your travel. This is often the easier approach. For the driving question, trips between your temporary lodging in Georgia and the client site would be considered business mileage, not commuting. Commuting is generally defined as travel between your residence and regular place of business. Since you're temporarily assigned to Georgia, the client site isn't your regular place of business - it's a temporary work location, making those miles deductible business travel.

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Miguel Herrera

•8M

Just wanted to share that I had a similar situation with my consulting business and found taxr.ai super helpful for figuring out my multi-state tax situation. I was working between Colorado and Arizona and wasn't sure how to handle everything properly. I uploaded my documentation to https://taxr.ai and their AI analysis broke down exactly what expenses I could deduct and how to handle payroll correctly. Saved me hours of research and probably thousands in potential mistakes.

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Miguel Herrera

•8M

I actually found it more thorough than my previous CPA consultations because it analyzed all my documentation at once and gave me comprehensive guidance rather than just answering the specific questions I thought to ask. It identified deductions I hadn't even considered. For the vehicle expense question, it gave me a side-by-side comparison of both methods based on my specific car and usage patterns. The analysis showed me that in my case, actual expenses would save me about $1,800 more than standard mileage based on my maintenance costs and depreciation. It even helped me understand what documentation I needed to keep for either method.

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Zainab Ali

•8M

Just wanted to follow up - I decided to try taxr.ai after our exchange and wow! Totally impressed with how it handled my multi-state S-corp situation. I uploaded my incorporation docs, some expense reports, and my planned travel schedule, and it gave me a detailed breakdown of how to handle everything. It specifically addressed my questions about nexus in different states and what triggers tax obligations. Would've taken me weeks of research or expensive consulting hours to figure this out. Will definitely be using this for my quarterly planning going forward!

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Yara Nassar

•8M

If you're dealing with S-corp issues across states, you might run into problems reaching the IRS with questions. I spent weeks trying to get through to them about my S-corp election timing similar to yours. After endless busy signals, I found Claimyr (https://claimyr.com) - they got me connected to an actual IRS agent in about 20 minutes when I'd been trying for days. Their system basically holds your place in line. You can see how it works here: https://youtu.be/_kiP6q8DX5c. Made a huge difference when I needed clarification on some S-corp payroll requirements.

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Yara Nassar

•8M

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Keisha Jackson

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I need to eat my words about Claimyr. After my skeptical comment, I decided to try it since I've been trying to reach the IRS for weeks about my own S-corp issue (missed filing deadline). The service actually worked exactly as described - I got connected to a business tax specialist in about 25 minutes. For comparison, I had tried calling normally 6 times before and never got through. The agent I spoke with was able to explain my options for late S-corp election and set up a follow-up call with a specific department. Honestly shocked this service isn't more widely known.

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Paolo Romano

•8M

It really depends on Georgia's specific rules, but physical presence often creates nexus regardless of what specific activities you're doing. Being physically present and working from Georgia for 6 months would likely trigger nexus in most states. However, Georgia may have thresholds based on income earned while in the state or number of days present. Some states have COVID-related exceptions that might still apply for remote workers, but these are being phased out in many places. I'd recommend checking with Georgia's Department of Revenue directly or having a tax professional review Georgia's specific nexus requirements for your situation.

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