On September 30, 2021, Massachusetts enacted an elective tax on pass-through entities to circumvent the $10,000 cap on federal itemized deductions for state, local and real estate taxes. Electing entities would pay income taxes at the entity level, reducing reported federal (but not state) income and providing a credit for 90% of the allocable amount of taxes paid.
We are evaluating the benefits provided by this legislation and will reach out to clients we think could realize substantial benefits from electing to pay the pass-through entity tax.
The latest draft of the Build Back Better Act includes a number of provisions that would impact taxes for individuals and businesses alike with a general effective date of January 1, 2022.
Some of the more notable changes for individuals include:
For businesses, the most notable change is the expansion of the 3.8% net investment income tax to also apply to business income from pass-through entities (predominantly affecting S-corporations, limited partnerships and real estate professionals).
Learn more about the Build Back Better Act.
It’s not too late to think about donating to charity. All taxpayers can get a benefit from making charitable contributions for 2021:
When considering a charitable donation, keep a few things in mind:
We can help you put together a plan to maximize your deductions while meeting your charitable goals.