We are excited to inform our clients and readers about California's New SALT Law, or State and Local Tax deduction.
By making this election, you could reduce your personal federal taxable income and serve as a prepayment of your personal California tax liability.
California has enacted AB 150- this tax is called a Pass-Through Entity (PTE) Elective Tax. Paying the PTE elective tax will reduce your personal federal taxable income and serve as a prepayment of your personal California tax liability.
California requires that all electing entities make a pre-payment of their 2022 PTE elective tax by June 15, 2022. Since this would be your entity’s first year making the election, you must pay $1,000.
The actual tax owed when a passthrough entity files its 2022 tax return is 9.3% of net income. If additional tax is due, we would inform you when your entity’s 2022 tax return is filed next year. If your actual tax is less than $1,000, the excess amount will be refunded.
California law AB 150 will allow pass-through entities, e.g. partnerships and S-corporations, to pay state tax on your behalf.
At Gold Standard, we always look for creative new ways to save our clients money. That's why our experienced tax team has reviewed each individual client's business and personal tax returns to determine who would be a good candidate for this election.
You could receive this same high level of care and attention to detail from your tax accountant too! Click here to schedule an appointment with one of Gold Standard's seasoned tax professionals.
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