Since the enactment of the Tax Cuts and Jobs Act (TCJA), an individual’s federal tax deduction for state and local taxes (SALT) paid during the calendar year is limited to $10,000. The SALT limitation impacted many individual partners and shareholders. Several states responded to this limitation by issuing workarounds to enact entity-level taxes for pass-through entities where the entity pays the tax instead of its owners and then deducts the full amount of state taxes paid, thus avoiding the $10,000 limitation at the individual level. It was uncertain whether the IRS would accept this entity-level tax workaround.
The complexity of the tax code generates a lot of folklore and misinformation that could lead to costly mistakes such as penalties for failing to file on time or, on the flip side, not taking advantage of deductions you are legally entitled to take and giving the IRS more money than you need to. With this in mind, let's take a look at seven common small business tax myths.
Providing tax benefits to investors who invest eligible capital into distressed communities throughout the U.S. and its possessions, Qualified Opportunity Zones (QOZs) were created under the Tax Cuts and Jobs Act of 2017 to spur economic development and job creation. If you're considering investing in a QOZ, here are five facts you should know: