Personal Deductions For State Income Taxes And Property Taxes

If you have a California or Connecticut business set up as an LLC /S Corp, please read on.......

You all know by know that an individual's personal tax deductible limit for SALT (state income taxes and property taxes) is $10k. Biden's "Build Back Better" plan that's currently being negotiated in Congress tentatively calls from increasing the annual SALT limit to $80k. Big difference obviously and will have a significant savings on your taxes.

With that said, California's recently passed AB 150 provided a workaround to the current $10k annual limit, essentially allowing owners of LLC/S corps to taking larger deductions for SALT. And Connecticut had already passed a similar workaround a few years back. If Biden's $80k limit is enacted, it may make those LLC/S corp workarounds obsolete.

For now, I say let's wait and see how the $80k plays out. We all hope to have Biden's BBB plan resolved shortly. Then i can advise on whether electing the provisions of CA's AB 150 would be necessary.

If you have questions, please let me know.