IRS SALT Cap

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.