Exploring PTE Tax Enrollment: A Missed Opportunity
As a co-owner of a partnership business with my spouse, we’ve relied on the expertise of the same CPA firm for several years. However, this year, their fees were unexpectedly high, prompting me to consider discontinuing their services. During a decisive conversation with their manager, it came to light that they could have offered us a Pass-Through Entity (PTE) tax enrollment to potentially reduce our tax liability. Unfortunately, this option was never brought to our attention until now, and we missed the deadline for enrollment for this tax year.
This revelation has left me pondering the benefits of PTE enrollment and the potential tax savings it might have offered. I’m reaching out to see if anyone has previously utilized PTE and can share insights regarding the percentage of tax savings they experienced. Your feedback and experiences would be greatly appreciated as we plan for future tax strategies.
Thank you!
One Comment
Thank you for sharing your experience with PTE tax enrollment; it’s indeed frustrating to discover options that could have significantly benefited you after the fact. PTE taxation can be a game-changer for many partnerships and S corporations, allowing income to pass through to individual partners or shareholders. This often results in lower overall tax liabilities compared to traditional corporations, especially considering the limitations on SALT (State and Local Tax) deductions which some states impose.
In my experience working with a tax advisor, I’ve seen partnerships save anywhere from 10% to 30% on their tax bills through strategic PTE elections, primarily due to how income is taxed at the individual level. It’s essential to start these conversations early in the tax year, as some states have specific enrollment windows, and missing them can mean leaving significant savings on the table.
For anyone considering PTE enrollment, I recommend conducting an annual review of your tax strategy with your CPA well before major deadlines to ensure all potential options are explored. Additionally, being proactive about communication regarding fees and services offered can help establish a more productive relationship with your CPA firm. Have you thought about seeking out a second opinion from another professional regarding your tax strategies for the upcoming year? That might help you avoid similar oversights in the future!