California (2021, August 30) - California is one of many states offering a SALT workaround for business owners. This helps to avoid the limit of a $10,000 federal deduction supposed to last through tax year 2025.

So long as your business is a corporation or partnership in classification, you can utilize the new measures outlined in the bill. A professional at a tax and accounting service Orange-based will help you understand how to use the PTE. Under this type of tax, state deductions adhere to the laws surrounding federal ones. This rule is according to California and federal government laws.

The specific name of this new bill is California AB 150. One addition to this law is that businesses in California using the PTE can pay 9.3% to the owner. Professional accountants can help to deduct this commission from the return you make.

According to California state law, the PTE tax is due at the same time as all other regular payments. If late, you could forfeit your rights to this benefit. You may also face penalties and interest fees on your payments, just like with traditional taxes.

Any business needs to talk with a certified accountant to determine if the PTE tax will reduce how much you owe. They also need to make sure their business type qualifies for this type of filing. The California Franchise Tax Board provides the ultimate say in these laws.

The California Franchise Tax Board includes the chair of the board of equalization, the state controller, and the director of finance. This California state government department monitors all income and state taxes, whether the taxpayer is a business owner or an individual payer. It is a department of the California Government Operations Agency.