Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Business Owners: Your quick step-by-step checklist to #PassThroughEntityTax

Name: Painting Business Owners: Your quick step-by-step checklist to #PassThroughEntityTax
Uploaded: 2023-10-16T13:15:01+00:00
Duration: 43 s
Channel: Daniel Honan
Description: Painting business owners should check four things: whether they live in a state with income tax, if that state has adopted a pass-through entity tax (34…

16 Oct 2023 · 1 min

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Painting business owners should check four things: whether they live in a state with income tax, if that state has adopted a pass-through entity tax (34 states have), if they own an S-corp or partnership, and if their earnings exceed roughly $50,000. PTET rules vary widely by state, so there's no one-size-fits-all approach.

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If you're trying to narrow it down, like, hey, should I pay attention to this or not? Step 1, do you live in a state with an income tax? If the answer is yes, is it one of the 34 states that have a PTET? Check that out. If the answer is yes, do you have a stake in some kind of business entity like a corporation, S corp, or partnership? If the answer to that is yes, then are you making enough money where tax planning makes sense to you? So Daniel, you mentioned $50,000. I think that's definitely a good point. Anything above that is probably worth your time to look into. So if you decide that you want to pursue something like this, This is where it gets really kind of tricky with the devil being in the details. Every state is different. Every state's PTET is different. How they handle it is different. The requirements to participate are different. So there is, it's not going to be a one-size-fits-all.
Plus your individual tax bracket is different. So all these things are different. So it's definitely hard to nail down and give some general advice.