The $10,000 State and Local Tax (SALT) deduction limitation was a huge strain on many people since 2018. Itemizing individuals with high property taxes or state taxes were hit the hardest.
Earlier this year the IRS gave their blessing on the SALT $10,000 workaround and now many states are implementing this workaround.
The workaround theoretically allows pass-through entities (S-Corporations & Partnerships) to pay a portion of its owners’ state taxes, which then the owner can claim a tax credit on their personal return.
However, the credit must reflect ownership percentage (pro-rata). This strategy has many hoops to jump through and should be laid out in a tax plan.
As always our tax plan for business owners or investors bundles this knowledge and MUCH more into account to create your individualized tax plan to be used for YEARS. Feel free to text, email, or call us to see how a tax plan could benefit you.