Overview
In Part 1, we explained how PTE owners can reduce federal taxable income by having their pass-through entity pay state income taxes at the entity level.
Using PTE Elections to Optimize SALT Deduction Limits—PART 1
Overview
The SALT deduction cap limits federal itemized deductions for state and local taxes, including state income taxes, property taxes, and personal property taxes.
With the cap now increased to $40,000, more taxpayers can deduct state and local taxes, but PTE elections remain a powerful strategy for high-income owners, non-itemizers, and pass-through businesses seeking federal tax efficiency. The IRS continues to recognize entity-level PTE deductions under Notice 2020-75.
Why an LLC Is Perfect for Your Small to Medium Business
Choosing the right business entity is a crucial decision for any business. The entity you pick can affect your tax bill, your personal liability, and other issues. A limited liability company (LLC) is an attractive choice for many businesses. It can be structured to resemble a corporation for owner liability purposes and a partnership for federal tax purposes. This duality may provide the owners with several benefits.
Understanding Taxes on Real Estate Gains
Let’s say you own real estate that has been held for more than one year and is sold for a taxable gain. Perhaps this gain comes from indirect real estate ownership via a pass-through entity such as an LLC, partnership, or S corporation. You may expect to pay Uncle Sam the standard 15% or 20% federal income tax rate that usually applies to long-term capital gains from assets held for more than one year.
Starting a Business? 9 Tax Tips for Sole Proprietors
When launching a small business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship, you need to understand the tax issues involved. Here are nine considerations:
How to Secure a Tax Benefit with the QBI Deduction
QBI may sound like the name of a TV quiz show. But it’s actually the acronym for “qualified business income,” which can trigger a tax deduction for some small business owners or self-employed individuals. The QBI deduction was authorized by the Tax Cuts and Jobs Act (TCJA), and it took effect in 2018.
Mastering S Corporations: Tax Breaks, Salaries, & Best Moves
Unravel the complexities of the S Corporation (S Corp) in this informative video.
S Corporations, the letter “S” just stands for the section of the tax code that created it.