President Donald Trump’s new tax law means a fourfold increase to a tax perk that could benefit entrepreneurs operating in high-tax states.
The tax law Republican lawmakers managed to pass this month raises the ceiling on state and local tax deductions to $40,000, from $10,000. It’s also known as the State and Local Tax, or SALT, deduction, and has faced vigorous debate as lawmakers battled over where to set the cap.
The SALT deduction primarily affects those in high-income tax brackets, but it also affects many entrepreneurs. Since most small businesses operate as pass-through entities—which include LLCs, S corporations, partnerships and sole proprietors—they pay taxes on their individual tax returns.
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