The passthrough entity tax is a workaround for the $10,000 individual income tax limit on the deduction for state taxes adopted in the Tax Cuts and Jobs Act of 2017. On February 9, 2022, Governor Newsom signed SB 113, which fixes some of the issues with California's passthrough entity tax.
According to the new instructions, domestic partnerships (including most LLCs) and S corporations must include new Schedules K-2 and K-3, reporting the owner's share of international transactions, even when the entity had no foreign activities.
According to 2020 FTB Publication 1001 (Revised November, 2021), page 13, the federal reduction of wages doesn't apply on the California income tax return.
I'm going to focus on two tax provisions of the Infrastructure and Jobs Act that I expect will have the broadest impact.
Based on the court's ruling, California app-based drivers would be classified as employees under the "ABC test" prescribed in AB 5.
According to the Notice, whether wages of controlling owners of a business and their spouses qualify for the employee retention credit depends on whether they have certain relatives.
Many high income and high net worth taxpayers will be relieved to learn that Biden's major revenue proposals are NOT included in the agreement.
The Senate approved legislation previously approved in the House of Representatives (H.R. 1799) that will extend the final submission date to May 31, 2021
Most significantly for individuals who are small business owners and investors, the extension doesn't apply to the first estimated tax payment for 2021
The IRS has posted guidance about the procedure for reporting unemployment compensation for taxpayers who qualify for the new exclusion of up to $10,200 per taxpayer.