Simply Tax® Episode 27 – The SALT Workarounds with Annette Nellen

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Parts of the Tax Cuts and Jobs Act (TCJA) limit many 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 help provide relief to their residents. Here’s what is covered:

• Annette’s overview of the objectives and process of enacting the TCJA @ 4:16
• Some local and state officials talk of dire consequences @ 8:41
• How to tell if you’re a net winner or loser under the TCJA @ 9:30
• The cap on the SALT deduction explained @ 12:23
• The state reaction to the cap @ 13:21
• What’s important to know if you itemize @ 15:11
• Are the SALT workarounds too good to be true? @ 17:54
• What does previously issued informal guidance from the IRS say? @ 21:26
• Recent IRS notice 2018-84 and the substance-over-form principle @ 24:35
• Risks and what to look at when evaluating your options @ 26:58
• What other types of workarounds have been introduced? @ 30:01
• The importance of understanding what’s on your tax return and your full tax picture @ 36:19
• Sense of bewilderment on how to approach the federal and state changes @ 38:15
• What else Annette is looking for @ 39:39

BIO FOR GUEST
Annette Nellen is a professor of accounting and finance and director of the San José State University (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.

Visit Annette's blog: 21st Century Taxation
Connect with Annette on LinkedIn
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