Lee B

Here is an in depth analysis of all the states ( almost 20 states now ) that have passed a PTE Tax: https://www.bdo.com/insights/tax/state-and-local-tax/five-more-states-enact-pte-tax-elections#:~:text=On July 19%2C 2021%2C Oregon enacted S.B.&text=An eligible PTE%2C which is,through business alternative income tax.”

Copied from Accounting Today: "Following enactment of the state and local tax deduction limitation in the Tax Cuts and Jobs Act in 2017, many states began looking for structures to circumvent the limit. These included trying to shift to a deductible charitable contribution, shifting to a payroll tax, and shifting to an entity-level tax. The Internal Revenue Service took a dim view of the charitable contribution approach, and the payroll tax approach appeared to be too complicated to implement. However, the entity-level tax has been blessed by the IRS, leading to a stampede among states to implement that approach. Notice 2020-75, issued Nov. 9, 2020, states that the IRS intends to issue proposed regulations clarifying that state and local income taxes imposed on and paid by a partnership or an S corporation are allowed as a deduction by that entity in computing its taxable income or loss in the year of payment. The notice also clarifies that the rule applies in a tax year ending after Dec. 31, 2017, covering the period back to implementation of the state and local tax deduction limit."

The key difference is that the CT PTE Tax is mandatory, while I believe the other state's PTE Taxes are voluntary.

Yes, there are at least 16 states that have passed a PTE Tax law now. It is a SALT workaround that actually does work. but only for S Corp owners and PTS partners.

Oregon has passed a very similar bill which goes into effect the beginning of next year. It allows PTEs to pay state income tax and then the owners/partners get an equivalent credit on their personal tax return. While Oregon hasn't written any rules or regulations yet, so far it seems like a win- win. I plan to use it with my own business.

Reading this post definitely reinforces my decision not to deal with divorced clients.

How do I get rid of the "Enable Push Notifications" popup? Every time I sign it pops up

"According to the IRS website, as of July 31, there were approximately 13.8 million unprocessed individual income tax returns. This is down from 15.6 million as of July 17, so the backlog is being chipped away slowly but surely,” said James McGrory, a CPA and shareholder at Drucker & Scaccetti in Philadelphia."

When I was still using ATX, I never had a problem with using the Reload Forms Utility Function. Of course you should save the return before you do it. Perhaps someone who currently uses ATX can chime in.

Perhaps reloading forms will fix this?

What does that mean?

Since you don't do their bookkeeping, there will more than likely be questions that you can't answer regarding 1099s and payments to individuals.

My past experience with these audits is: 1. Reconcile payroll records with quarterly reports 2. Review any subcontractors with Form 1099s to see if their classification is appropriate 3. Review Cash Disbursement and GL Records for payments to individuals with no 1099s. All of mine have been audits in my office.

I have $ 250,000 of coverage for $340.00

I have a very reasonably priced policy with Hiscox through my local insurance agent.

Your scenario implies your client is a cash basis C Corp, in which case the numbers don't don't make sense to me.

It will be interesting to see how this works out? My guess is that you will have pay via third party using a credit card or debit card

Of the preparers on this board, most of the ones that have switched (including myself) have changed from ATX to Drake. I am curious, why did you decide to switch from Drake to ATX?

As a practical matter a new small business could do all of these things correctly and still fail to make a profit. They still have to sell a product or service to a customer willing to pay.

Tom, after reading your post again, it's pretty "tongue in cheek" so I can't see giving it to a client

If you are a practicing CPA, you are correct. However, if you are an EA like myself or an LTC then this doesn't apply, even though there are lots of quasi professionals out there giving very bad advice.

The % in 5 b depends on what kind of business you are in. 5 b thru 5 d is confusing. I would take $ 20 / .60 = $ 33.33, however it again depends on the kind of work you are doing. As a practical matter most self employed aren't able to bill out 100 % of their time worked. My past experience with self employed clients is that it's difficult to make significant profits unless you are billing at least $ 80 per hour.

The publication date is August 14th, so hopefully it's up to date. The regular Kindle price is $ 9.99 Kindle Unlimited has a 30 day free trial, then it costs $9.99 per month.

Just remember, if this generates a state tax deduction then the partner's federal outside basis and state outside basis will be different.

Please follow the link TexTaxToo posted re 2021-49 for detailed analysis.