If you telecommute for an out of state employer you may want to take a look at this article.
The US Supreme Court let stand a New York district tax court ruling in which an employee of a New York employer was liable for New York state income tax on 100% of his earning even though 75% of the work was done in Tennessee.
It turns out the employee was telecommuting for his own convenience and not that of the employer. As a result he'll have a pretty hefty tax bill to content with.
This article offers some pretty good advice: "If you telecommute or employ telecommuters, consider reviewing the language in your employment contracts. Where appropriate, the contract should clearly state when telecommuting is required by the employer as a condition of employment."
Pretty much as long has there have been outside consultants, they have been asking this question: W-2? 1099? or Corp-to-Corp?
For the unintiated, any new consultant needs to determine how they will organize their business. And these are the usual options people talk about. You would think it's a pretty straight forward calculation, but it can really become quite complicated.
I made a new posting, Consultants: W-2, 1099 or Corp-to-Corp?, that goes into some detail about the issues you need to consider. Each option has its own advantages and drawbacks. As with most things, it's all about the trade-offs.