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Important tax deduction for those in TX who had any contract, LLC, or business income

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  • Important tax deduction for those in TX who had any contract, LLC, or business income

Hi! 

We are constantly looking for ideas to save you on tax & ensuring our clients & community are aware of them. This week I wanted to highlight a frequently-forgotten deduction: TX State Franchise Taxes.

This post is specifically for those that live in TX or own a business operating in TX. Some examples:

    • Have an LLC or corporation

    • Own a partnership

    • Earn any type of self-employment income which is subject to franchise tax 

If this is you, please read on. If you are not sure if this applies to you, let me know & I can explain. 

Now to get to the point:

    • Franchise taxes for the above activities are normally actually deductible on your federal income tax return 

    • Many people do not know this & most tax software does not highlight this as an option 

    • For this reason, we see this deduction missed on a regular basis 

For the sake of a quick example, if you are in the 37% tax bracket & paid 30k in franchise taxes, your federal tax reduction is $11,100. That is quite an important deduction to take! 

If you are not sure if this was done, please have us check right away. There is a 3-year statute of limitations for federal refunds & we can petition for a tax refund for you.

Just fill out the form below for assistance. Please do not wait until year-end or tax filing season for the following reasons:

    • Summer is the time to look through any possible past adjustments 

    • Federal refunds expire in 3 years

    • Mid-year planning on average saves at least a few thousand dollars in taxes each year. We can go over both this as well as many other strategies now since most must be implemented now if you are to take advantage of them in 2023

Just hit “Send message” if you need help with this or other types of tax reduction planning. There are countless other strategies available for business and personal that we are happy to share.

Thank you for reading & I hope this tax deduction helps – please feel free to share it with any friends & relatives! 

— 

George Dimov CPA

www.dimovtax.com

(833) 829-1120 toll free  

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