SALT Workarounds with Annette Nellen #027

Parts of the Tax Cuts and Jobs Act (TCJA) limit some taxpayers’ ability to deduct their state and local taxes (SALT) for the next seven tax years. Tax professor Annette Nellen provides some background on this temporary limitation and breaks down the efforts several states are undertaking to provide relief to their residents. TIME STAMPS OF WHAT’S COVERED [4:16] Annette’s overview of the objectives and process of enacting the TCJA [8:41] Some local and state officials talk of dire consequences [9:30] How to tell if you’re a net winner or loser under the TCJA [12:23] The cap on the SALT deduction explained [13:21] The state reaction to the cap [15:11] What’s important to know if you itemize [17:54] Are the SALT workarounds too good to be true? [21:26] What does previously issued informal guidance from the IRS say? [24:35] Recent IRS notice 2018-84 and the substance-over-form principle [26:58] Risks and what to look at when evaluating your options [30:01] What other types of workarounds have been introduced? [36:19] The importance of understanding what’s on your tax return and your full tax picture [38:15] Sense of bewilderment on how to approach the federal and state changes [39:39] What else Annette’s looking for BIO FOR GUEST Annette Nellen is a professor of accounting and finance and director of the SJSU Graduate Tax Program. Prior to joining SJSU, she was with a tax manager with Ernst & Young and an IRS revenue agent and lead instructor. Annette has testified before the U.S. House Ways and Means Committee, U.S. Senate Finance Committee, California Assembly Revenue and Taxation Committee and tax reform commissions and committees on various aspects of federal and state tax reform. Connect with Annette on LinkedIn Follow Annette on Twitter Annette’s blog: 21st Century Taxation GET MORE SIMPLY TAX A complete archive of our episodes is available on our website and YouTube playlist. We’d love to hear from you! Email feedback and questions we can help answer to [email protected] Connect with Damien on social media: LinkedIn | Twitter