Navigating State and Local Tax Deductions with Jeff Hoopes and Scott Dyreng from TaxChats

In this episode of the SALTovation podcast, Stacey Roberts and Meredith Smith speak with hosts of the TaxChats podcast, Scott Dyreng, Professor of Accounting at Duke’s Fuqua School of Business, and Jeff Hoopes, Associate Professor at Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. They discuss the $10,000 state and local tax (SALT) deduction cap and explore the impact of the cap on taxpayers, particularly in high-tax states. They discuss various strategies and issues related to SALT, the political dynamics surrounding the cap, potential future changes, and the complexities of filing taxes in multiple states. Topics discussed in this episode:The $10,000 state and local tax deduction cap and its impact on taxpayersThe cap's effect on business owners with income flowing through multiple statesImpact of the cap on taxpayers in high-tax states like California, New York, and New JerseyThe potential future of the salt cap and the political dynamics surrounding itWorkarounds implemented by some states to mitigate the impact of the capImplications of state income tax on personal salaries and employment taxesThe complexity of filing taxes in multiple states and the potential for double taxationQuotables“Another part that we haven't mentioned here is also very important is this deduction only exists for people if you itemize your tax itemize on your tax return. So that's like 90% of taxpayers don't itemize their tax return. And it's pretty much just like with income. So the 90% 90% of taxpayers the lower income people the 90% lower. So a lot of people don't itemize at all. This doesn't have any effect. So you're only starting with the 10% richest people. And then from there only the people that like exceed that $10,000.” -Jeff Hoopes [11:05]“It's kind of like letting the business pay the tax at the state level, not having it flow through and then only flowing through the after-tax amount. Whereas in the pre world, I was like flowing through the whole amount and being forced to pay a claim. It was like an individual thing. So it sort of converted it from an individual tax to a business tax.” -Scott Dyreng [21:37]ConnectSubscribe on your favorite podcast app here.Follow us on LinkedIn and YouTube.Talk to a Tax Advocate Today!Mentioned in this episode:Schedule a Call with the Aprio Team Now!Introductory Call