‘Dentist saves $36,340 by electing PTE before it was too late.’
PTE (Pass-Through-Entity) tax credit allows business owners and investors to deduct all of their state taxes.
1 min read

Money Found

29 November 2023

Dentist saves $36,340 by electing PTE before it was too late.

Angie M Grainger

We've been trying to get the word out about the PTE tax credit available to business owners, because it can be a big deduction that many CPAs are missing.

When you live in a state that has high income tax (CA has 12.3% tax for high-income earners), you don't get a deduction for this tax on your federal return due to the limitations.

Some state tax deductions are allowed on your itemized deductions such as income tax, property taxes, sales tax, DMV fees, and more, but there's a problem. All combined you can only deduct $10,000, and if you live in CA and own a house, chances are - your property taxes alone can max that out.

So, when this $10,000 limitation came in play a couple years back, states got smart.

They created a 'work-around' that allows business owners to pay their state tax through the business and get a full, 100%, deduction off their federal income.

It just irritates me that some of our new clients lost $575,080 dollars in 2021-2022 because their CPAs didn't know about this deduction (they were in NV and FL who don't have income taxes, so they weren't in the loop).

It's the first thing we look for now, and make sure that every business owner in a high-tax state takes advantage of this.

And, not just business owners, but also investors, real estate investors, family offices, and more.

Because our dentist sold his business this year, he had a large taxable gain. We helped him get organized, create a tax projection, and save $36,340 in taxes.

Why settle for anything less than your own, personal CPA firm?

Why settle for anything less than your own, personal CPA firm?

Our team of Certified Public Accountants, Personal Financial Specialists, and Certified Financial Planners® is dedicated to personal finance—so we’re dedicated to you.

Our team of Certified Public Accountants, Personal Financial Specialists, and Certified Financial Planners® is dedicated to personal finance—so we’re dedicated to you.

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