Tax Warrior Chronicles

NJ Enacts New SALT Workaround with Entity-Level Tax Election

Posted on Thu, Jan 30, 2020

By: Dan Marques, CPA, MT

 

If at first you don’t succeed, try again.  That appears to be the moto of the NJ Legislature after passing the Pass-Through Business Alternative Income Tax Act (the Act), signed into law by Governor Murphy on January 13, 2020. This is the state’s second attempt to circumvent the $10,000 federal cap on state and local tax (SALT) deductions imposed by the Tax Cuts and Jobs Act (TCJA).

 

A trip down memory lane

Some may recall NJ’s first attempt to address the SALT cap in May 2018, which called for towns, counties and school districts to set up charitable funds for taxpayers to make contributions in exchange for property tax credits. Under this program, individuals

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Bypassing the $10K State and Local Tax Deduction Limitation

Posted on Tue, Feb 06, 2018

By:Irina Moyseyenko, CPA, MT

 

With just a couple of lines, the Tax Cuts and Jobs Act of 2017 sent state governments into a frenzy by limiting the state and local tax deduction to $10,000 for individual taxpayers in 2018 and after.  States with especially high income or real estate taxes were scrambling to provide their residents with some relief.  Luckily for Pennsylvania taxpayers, there is a credit that reduces your state tax liability and allows a federal deduction.

 

The Pennsylvania Educational Improvement Tax Credit (“EITC”) allows you to contribute to an eligible scholarship and educational improvement organizations and receive two tax benefits:

 

  1. Gives a credit against PA income
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Tips on Deducting Charitable Contributions

Posted on Wed, Apr 10, 2013

 

Charitable giving is a large part of the American citizens' will to support those who are less fortunate.  We get a sense of satisfaction when we are able to help our fellow man (or woman). And, though giving to charity may fulfill us and make us feel good it can also help lower our tax bill. In a recent release, the IRS offered tips to help ensure your charitable contributions make your wallet feel as good about giving as you do.

 

1. If you want a tax deduction, you must donate to a qualified charitable organization (A nonprofit organization that qualifies for tax-exempt status according to the U.S. Treasury). You cannot deduct contributions you make to an individual, a political

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