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Retirement Tax Services Podcast
What the heck is PTE Tax? with Kelly Rohrs
Oct 16, 2023
In this podcast, Steven is joined by Kelly Rohrs, a CPA specialized in working with business owners. They discuss the Pass Through Entity (PTE) Tax and its importance for business owners. They also mention the impact of the salt limitation and the need for thoughtful entity selection. They address misinformation about PTE tax and emphasize the importance of seeking professional advice. The podcast concludes with a recap and a preview of future episodes for business owners.
31:07
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Quick takeaways
- PTE tax is a workaround to continue deducting state income taxes after the SALT deduction limit of $10,000, and it varies in terms of guidelines, due dates, and credit percentages among different states.
- When choosing between entity types, business owners should consider factors such as industry, anticipated income, future plans, and location, and entity selection should not solely focus on tax savings but also consider legal and business considerations.
Deep dives
Overview of PTE Tax and Its Purpose
The podcast episode discusses the pass-through entity (PTE) tax and its purpose as a workaround to continue deducting state income taxes after the tax cuts and jobs act in 2017 limited the salt deduction to $10,000. PTE tax varies from state to state, with different guidelines, due dates, and credit percentages. Some states offer a 100% credit for PTE tax paid, while others offer a 90% credit. The episode highlights that PTE tax is paid by pass-through entities like S corporations or partnerships, and the importance of understanding the rules and potential benefits or costs based on individual circumstances.
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