On April 19, New York State passed a budget bill that included a Pass-Through Entity (PTE) tax election that impacts partnerships, limited liability companies treated as partnerships, and S-corporations.
Clients and many taxpayers often wonder whether it might be beneficial in retirement or while still working to change their place of residency as a way to minimize their current and future state tax obligations, or as part of their long-term strategy to minimize estate taxes to a more tax-friendly state. While most states tax all or a portion of the income of their residents, certain states like Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax, and New Hampshire and Tennessee do not tax earned wages. These and other states may not have “state” estate and/or inheritance tax as well, making them very appealing for those looking to change their residency in the long-term.
For busy real estate agents, keeping track of every business expense, and figuring out which expenses are deductible, is probably last on your list of priorities. And it can be especially complicated for independent real estate agents, whose taxes are generally not withheld from commission checks, and who have additional tax liabilities as self-employed individuals.
The IRS recently announced per diem rates that can be used to substantiate the amount of business expenses incurred for travel away from home on or after October 1, 2020. Employers using these rates to set per diem allowances can treat the amount of certain categories of travel expenses as substantiated without requiring that employees prove the actual amount spent. However, employees must still substantiate the time, place and business purposes of their travel expenses.