Question

Independent Contractor Moved from Hawaii to Texas Tax

Forum|Forum|3 years ago
April 3, 2023
1 reply
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My family moved from Hawaii to Texas at the end of July 2022. My wife was an Independent Contractor for approximately 3 months from August to October 2022, staying with her original employer located in Hawaii. My wife also cashed out-then-rolled her 401k from this original employer to a ROTH IRA in October 2022. After inputting the raw data into TurboTax, it appears we need to pay Hawaii income tax and 401k cash out-roll over tax for her time as an Independent Contractor, though we had already moved to Texas already. It’s our understanding that we wouldn’t have to pay taxes as an Independent Contractor in Hawaii if we moved to Texas, and Texas does not have state income tax.

C

Cynthiad66

First, since you rolled a 401k in to a Roth, you have to pay taxes on the amount of the rollover.

Since you haven't paid income taxes on that money in your traditional 401(k) account, you will owe taxes on the money for the year when you roll it over into a Roth IRA.

Was your wife paid on a form 1099NEC or a W-2? If she is reporting her Hawaii income on a Schedule C as an independent contractor, where does the HI taxes come into play.

Now, are you filing as a part year resident of Hawaii, then for part of the year you may owe taxes for Hawaii. You do not need to file a TX income tax return because there is no Income Tax

If you have additional questions, please return to this forum.

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