Oct 16 – Dec 31 · Planning Season
2026 Year-End Planning Summary
Growing California-sourced consulting revenue is now generating a real CA nonresident tax bill — an estimated $28,000–$36,000 this year — with no Washington resident credit available to offset any of it, unlike a client moving between two taxing states.
Each move as a range, stepping down from the current-path liability.
California market-based sourcing on growing CA-client Schedule C revenue
Addressed by the plan
1 of 1 quantified
Time-sensitive moves before December 31.
Multi-year planning to revisit beyond this season.
Items to resolve before the client conversation.
An S-corp election would not change the underlying §25136 market-based sourcing rule — the entity's CA-sourced revenue is still tested the same way — but it could introduce a California nonresident withholding requirement on Diego's K-1 share that does not apply to Schedule C income reported directly on his 1040. This should be modeled alongside the self-employment-tax savings the election is more commonly evaluated for, so the two effects aren't assessed in isolation.
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