S3 Advisors
The IRS issued guidance on the SALT cap workaround at the state level in November 2020. Since then, more than a dozen states have passed legislation to approve the workaround and there is pending legislation in at least six more. This may offer significant tax savings for business owners by allowing the company to cover part of the owner’s state income taxes. To read more visit cnbc.com.
IRS releases proposed regulations providing owners of pass-through businesses (S corporations, partnerships, and LLCs treated as partnerships) a workaround for the $10,000 State and Local Tax deduction cap. The guidance indicates that if the business elects to pay state income taxes at the entity level, rather than at the individual level, the taxes can be deducted on the business return. In effect, this creates an offsetting credit which applies against the individual’s income tax liability. To read more visit taxfoundation.org.