| You have a complex tax situation. I recommend you see a tax professional who will need to review the precise facts. You may very well need to pay taxes in the countries you are getting income from as well as here.
Generally, you will report all the money as income. You will get a credit for taxes paid in other countries. You will always need to deal with your resident state. As to if you owe taxes in other states, you need to review that state's laws.
Sadly, the tax law is set up for brick and mortar businesses. The more modern internet era is still evolving tax wise as all the countries and states have set up a taxing scheme by using people who have no idea of what is actually happening and, if they do, they don't care a whit about compliance costs.
I do a lot of taxes and we have some international issues. Multi-state issues are difficult as well, because I have to look up everything when other states are involved. (There are some new practice rules regarding multi-states causing fees to be paid to each state practiced in.) Few have the experience to just know how certain income will be treated in difficult scenarios. I charge for my time to reject filing in another state as much as for making a filing. This sometimes angers the taxpayer as to why no return was required and yet they were billed for me not doing anything. (At least anything they saw.)
My point is that it may be expensive the first year. Spend the money and, if you are so inclined, do your own returns thereafter.
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When you are a Bear of Very Little Brain, and you Think of Things, you find sometimes that a Thing which seemed very Thingish inside you is quite different when it gets out into the open and has other people looking at it.
--W. T. Pooh (aka A. A. Milne) | 
02-04-2008, 01:31 PM
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