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Real Estate Shifts Toward Outsourcing Accounting

Posted on by Michelle Antico

Faced with challenges, many real estate professionals are exploring a new outsourcing path to streamline their operations and gain peace of mind. Outsourced accounting has become a powerful solution for property owners seeking to overcome real estate-specific financial obstacles.   

This blog will discuss real estate owners’ key pain points, how outsourcing accounting addresses those challenges, and why this approach is gaining traction across the industry. 

Pain Points for Real Estate Owners   

Despite their expertise in managing properties, many real estate owners find the financial side of the business to be a significant hurdle. Here’s a closer look at their common pain points and frustrations in accounting management. 

People Challenges   

  • Difficulty finding talent: Recruiting and retaining accountants with real estate expertise is no easy feat. The aging workforce and lack of succession planning only add to this challenge.
  • Rising costs: The cost of hiring and retaining experienced in-house accountants is climbing, putting a strain on budgets. Many in-house teams also lack specialized technical training, leaving gaps in knowledge and performance.
  • Coverage issues: Vacations, medical leave, or turnover in accounting departments can lead to critical disruptions in financial operations.

Process Inefficiencies   

  • Lack of structure: Many real estate operations lack formal accounting processes, written procedures, or strong internal controls. This increases the risk of errors and even fraud. 
  • No contingency plans: Most in-house teams are not equipped to handle unforeseen staffing disruptions, leading to further inefficiencies.

Technology Limitations   

  • Outdated systems: Real estate accounting often lags in technology, running on obsolete software or dealing with manual processes. 
  • Limited integration: Without automation or integrations for banking and AP tools, operations remain slow and prone to mistakes.

Office and Facilities Constraints   

  • Small spaces: Limited office environments make expanding accounting operations or attracting talent difficult. 
  • Lack of scalability: As property portfolios grow, scaling up in-house operations becomes resource-intensive.

Financial Reporting Frustrations   

  • Delayed reporting: Late or inaccurate monthly reports hinder decision-making. 
  • Tax complications: Missed tax deadlines and poor bookkeeping often result in higher prep fees and penalties. 
  • Lost opportunities: Property owners struggle to make timely, informed decisions without current and accurate data.

What an Outsourced Accounting Firm Provides   

An outsourced accounting firm is designed to address these challenges head-on, offering tailored solutions that meet the specific needs of real estate owners. 

Comprehensive Services   

  • Weekly and monthly accounting workflows, including tasks like bank reconciliations and month-end closes. 
  • Preparation of detailed financial reporting packages. 
  • Expertise in technical accounting for complex real estate transactions.

Communication and Coordination   

  • Scheduled monthly review calls to discuss financial health and answer questions. 
  • Seamless collaboration with tax teams for streamlined year-end filings and proactive strategies.

Advanced Technology Solutions   

  • Integrate accounting systems with AP, bill pay platforms, and custom dashboards. 
  • Assistance in migrating to modern cloud-based systems, ensuring real-time visibility and access to financial data. 
  • Access to internal technology teams for support with data analysis and system optimization.

Staffing & Continuity   

  • A collaborative, layered team structure ensures redundancy, minimizing disruptions during absences or turnover. 
  • Access to experts across multiple accounting disciplines, from SALT (State and Local Tax) to advanced financial reporting.

Space and Cost Efficiency   

  • A fully remote service model eliminates the need for expanded office space. 
  • Scalable solutions that grow (or adjust) with your portfolio without recruiting additional employees.

Why Real Estate is Ripe for Outsourcing   

The real estate sector is uniquely well-suited for outsourced accounting thanks to its recurring and standardized transactions. In addition, the specialized knowledge required makes the case for outsourcing even clearer.

It eliminates internal payroll and training costs, while offering flexibility to scale with fluctuating portfolios. Top-notch technology from external providers ensures accuracy, reduces errors, and enhances financial visibility.

Additionally, an outsourced accounting firm collaborates seamlessly with tax professionals to uncover savings opportunities, streamlining compliance and profitability. By leveraging outsourcing, real estate businesses can focus on growth while leaving accounting to seasoned experts.

A Strategic Advantage for Real Estate Owners   

Outsourcing accounting isn’t just a backup plan or a solution for emergencies anymore. It’s a strategic decision that offers real estate owners enhanced visibility, reduced risks, and more efficient operations.

By partnering with an outsourced accounting firm, property owners can shift their focus from the back office to increasing their portfolios and returns.

If you’re ready to elevate your real estate business and streamline financial operations, our team is here to help. Talk to our team today and explore how our real estate outsourcing accounting services can support your success!

New York State Budget 2025 Brings Sweeping Tax Changes

Posted on by Michelle Antico

New York State’s newly enacted $254 billion budget is more than a fiscal plan—it brings a variety of tax law changes that will affect taxpayers across the board. Signed into law by Governor Kathy Hochul on May 9, 2025, the New York State budget 2025 includes significant tax changes with implications for businesses and individuals.

At Wiss, we’re breaking down the key provisions that could impact your financial strategy—and your bottom line.

Individual Relief and Rate Adjustments

In a nod to inflation relief, eligible New Yorkers will receive a one-time tax credit of up to $400 for joint filers with adjusted gross income of $300,000 or less and $200 for single filers earning $150,000 or less, based on 2023 adjusted gross income.

Additionally, middle-income earners can expect a modest reduction in personal income tax rates over the next two years. The phased-in tax cut provides a 0.2% reduction that will apply to the bottom 5 income tax brackets. This would reduce rates for joint filers making up to $323,200 and for single filers making up to $215,400. On the flip side, the legislation extends the surcharge for high earners from 2027 through 2032.

New Reporting Obligations for Partnerships

New York is aligning with the federal Bipartisan Budget Act of 2015 by instituting new reporting requirements for partnership audit adjustments. Partnerships and their partners now face specific timelines and obligations to report and pay state tax following federal changes. These changes add complexity, so proactive compliance is essential.

Payroll Tax (MCTMT) Updates

Employers in the Metropolitan Commuter Transportation District (MCTMT) will see new rates based on size and location, with larger employers in NYC bearing higher payroll mobility tax burdens. While the legislation reduces the lower tiers of the MCTMT rate, it creates new top rates for each of the zones. Previously, the FY 2024 budget divided the district into two zones, which Zone 1 includes the 5 boroughs of New York City and Zone 2 which includes Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties.

Incentives and Expansions Worth Watching

New York is doubling down on economic development through expanded programs:

  • Low-Income Housing Tax Credits will increase incrementally through 2029.
  • Historic Tax Credits become transferable and available to more affordable housing projects.
  • Excelsior Jobs Program gets extended through 2039, while separately enhanced for semiconductor-related businesses.
  • Credits for hiring veterans and individuals with disabilities are now extended and more generous.

Notably, the state budget does not extend the pass-through entity tax (PTET) election deadlines—a workaround for the federal $10,000 cap on state and local tax deductions. While initial proposals sought to move the election deadline from March 15 to September 15, this provision was ultimately excluded from the final budget.

Navigate the New York State Budget 2025

Many of these changes are already in effect—or will be soon. Whether you’re navigating new real estate limitations, reassessing tax estimates, or preparing for additional reporting under partnership audit rules, it’s critical to understand how this legislation may affect your operations and compliance obligations.

At Wiss, we’re here to help you decode these changes and make the adjustments necessary to stay ahead. Reach out to your advisor or contact our tax team to start a conversation.

Costing Less with Smart FP&A Moves at Dave’s Hot Chicken

Posted on by Michelle Antico

The Wall Street Journal recently spotlighted how Dave’s Hot Chicken, a rapidly growing fast-food chain, navigated the challenge of soaring wages in California to maintain profitability. With over a quarter of its 270 locations in the state, the chain faced remarkable pressure when preparing for minimum wage increases in April 2024.

However, instead of being blindsided, Dave’s management took proactive measures, convening meetings with franchisees to chart a path forward that would mitigate costs while protecting profitability.

This success story underscores a robust Financial Planning and Analysis (FP&A) team’s vital role in empowering businesses to make strategic, data-driven decisions and remain agile despite significant challenges.

Tackling Cost Increases with Strategic Insights

Confronting rising labor costs requires carefully assessing how proposed strategies and investments influence a company’s bottom line. For Dave’s Hot Chicken, FP&A professionals became key players in identifying and evaluating initiatives that could offset wage increases. By analyzing tactical shifts and forecasting outcomes, the FP&A team provided solutions poised to reduce costs, streamline operations, and potentially unlock additional revenue streams.

Three noteworthy interventions drove the company’s success:

Installing Automated Dishwashers  

The FP&A team identified opportunities to automate labor-intensive processes, beginning with dishwashing. Transitioning from hand washing to automated dishwashers reduced the time and personnel required for this task.

Implementing a Grease Siphoning System  

Similarly, installing grease siphoning systems simplified the cumbersome process of handling 35-pound oil drums. This innovation saved time and enhanced employee safety and operational efficiency.

Introducing Self-Ordering Kiosks  

Self-ordering kiosks, initially a point of hesitation for management due to concerns over impersonal customer service, turned out to be a game-changer. The user-friendly interface enabled upselling opportunities by encouraging customers to add high-margin items like drinks and bundles. This innovation increased sales while optimizing labor allocation.

Balancing Costs with Benefits

While these initiatives aimed to reduce labor intensity and boost efficiency, they came at a cost. Industrial dishwashers and grease siphoning systems required significant capital investment and ongoing maintenance. Each self-ordering kiosk costs over $5,000 per location, plus monthly service fees. Dave’s FP&A team’s challenge was determining whether the cost savings, increased sales, and improved employee allocation justified these expenses.

By meticulously assessing the impact of these measures, the FP&A team ensured that the initiatives delivered tangible value. Their analysis paved the way for increased location profits, with stores averaging a $6,000 boost in profit even amid wage hikes.

The Risks of Poor Evaluation

Dave’s Hot Chicken’s success highlights the importance of thorough evaluation before committing to new initiatives. Without careful vetting, businesses risk costly missteps, such as investing in technology that fails to deliver promised savings or value. For example, spending on machines that don’t significantly improve efficiency could leave a company grappling with sunk costs and diminishing profitability.

The story serves as a powerful reminder of the consequences of insufficient analysis. Conversely, when FP&A experts collaborate effectively with management, they bring unparalleled value by guiding organizations toward smart, strategic decisions.

Lessons in Agility and Proactiveness

Dave’s Hot Chicken has set a clear example for businesses navigating economic pressures. Its proactive measures reflect a best practice applicable across industries. To stay competitive and adaptable, businesses should proactively anticipate potential challenges and develop actionable plans to address them.

Many organizations today face looming uncertainties, such as trade policy shifts or regulatory changes, that could impact costs and operations. Proactively engaging an FP&A team to analyze risks and identify opportunities allows companies to respond nimbly to unforeseen circumstances.

Partner with Experts to Stay Ahead

At Wiss, our FP&A professionals excel in identifying risks and opportunities while offering tailored analyses to help businesses remain resilient in a changing landscape. Whether it’s planning for cost increases or streamlining operations, our experts partner with you to ensure that your business is both nimble and equipped to thrive.

Learn how the Wiss FP&A team can empower your company to succeed in uncertain times. Contact us today to begin crafting a strategy that works for your business.

Donald Trump Tariffs: How They’re Evolving in 2025

Posted on by Michelle Antico

Global trade continues to shift under the impact of Donald Trump tariffs. For business owners, CFOs, controllers, and high-net-worth individuals navigating these waters, staying updated on tariff changes is crucial. See how CFOs can proactively mitigate the impact of Trump’s tariffs through financial strategy. Recent moves from the U.S. government present both immediate and longer-term challenges, leaving companies to rethink strategies.

For CFOs, controllers, and high-net-worth business owners, this article offers a breakdown of the latest tariff timeline, outlines the evolving tariff landscape and actionable steps companies can take to adapt.

Latest Tariff Timeline

Understanding the latest developments in Donald Trump tariffs policies is essential for anticipating market changes and making informed decisions. Below is a breakdown of the key Trump tariffs update and their implications:

Major Shift in U.S. and China Tariff Agreement

The most significant development in the Donald Trump tariffs update came on May 14, 2025; the U.S. and China reached a significant milestone with a fresh trade agreement. Both nations agreed to reduce tariffs by 115% from their most recent highs. This move effectively resets many trade barriers, though it retains a 10% baseline tariff for stability.

Additionally, the U.S. temporarily suspended its 34% reciprocal tariff on Chinese imports for a period of 90 days while maintaining the required 10% base tariff. This suspension signals a willingness to encourage trade while also monitoring compliance from China before making further long-term commitments.

Temporary Suspensions

Starting April 9, 2025, the U.S. implemented a 90-day pause on most country-specific tariffs, excluding those related to China. This provides businesses with temporary relief, but uncertainty looms as these tariffs could return as early as July 9, 2025, unless further action is taken. Short-term suspensions like these challenge companies to adapt quickly, maintaining flexibility in operations.

What Triggers a Trump Tariff, and What Comes Next?

Former President Trump has left the door open for further tariff adjustments. Future rates will likely depend on ongoing trade negotiations and how well foreign countries comply with U.S. trade expectations. This unpredictability forces companies to remain agile and ready to respond to shifting costs and trade environments.

These policy shifts emphasize the fluidity of tariff structures and highlight the importance of preparing for both immediate and long-term effects on costs and operations.

What Companies Can Do in the Meantime

While the tariff landscape evolves, companies don’t have to sit idle. Strategic actions taken now can help minimize financial impacts and uncover potential competitive advantages.

Re-Evaluate Transfer Pricing Policies for Intercompany Transactions

For multinational corporations, intercompany transactions represent a critical area for review. Tariffs directly affect the cost of goods crossing borders within a corporate structure, so companies should proactively review their transfer pricing policies to consider the new tariffs.

Conducting a comprehensive analysis of your global supply chain can help identify products and transactions most impacted by tariff changes. Learn more about the impact of 2025 tariffs on product-level profitability and margin management strategies. From there, you can reprice transactions to not only comply with regulations but also reduce duty exposure.

Frame the Import Tax as a Marketing Strategy

Viewing import tariffs as a marketing opportunity rather than just a cost challenge can unlock unexpected benefits. Brands importing goods may reposition themselves as premium players in their markets, justifying higher prices with the narrative of offering higher-quality, globally-sourced products.

For example, businesses can emphasize the unique value or craftsmanship of imported goods to offset customer hesitations about higher prices. Pairing this strategy with transparent communication can enhance brand loyalty and build trust.

Stay On Top of Policy Updates

Although not a direct operational change, monitoring trade negotiations and tariff updates is critical. Many industries will feel the effects of policy changes differently, and being informed will allow you to pivot efficiently. Assign dedicated personnel or subscribe to services that deliver timely updates and insights on global trade policies.

Explore Local Sourcing Options

While Donald Trump tariffs can pose challenges, they also serve as a reason to re-evaluate supply chains. If certain imports become unsustainably expensive due to renewed tariffs, consider sourcing from domestic suppliers. Diversifying your supply chain geographically can help minimize risk and provide more predictable cost structures over the long term.

FAQs About Donald Trump Tariffs

1. What is the current status of Trump’s tariffs in 2025?

As of July 31, 2025, the U.S. and China reached a new trade agreement (initially brokered in May 2025) that suspended the additional tariffs imposed on April 2, 2025. However, the agreement maintains a 10% baseline tariff along with all pre-existing duties, such as Section 301 and Section 232 tariffs.

The U.S. also extended temporary suspensions of country-specific tariffs, originally set to expire on July 9, 2025, to August 1 for most countries—and August 12 for China. Several nations, including the UK, Vietnam, Indonesia, Japan, and the Philippines, secured trade agreements featuring reduced tariffs.

In contrast, countries like Canada (35%) and Mexico (30%) now face higher tariff rates starting August 1, 2025, unless new trade terms are negotiated.

2. How do Donald Trump tariffs affect U.S. businesses?

Trump tariffs increase the cost of importing goods, which can:

  • Erode profit margins
  • Disrupt supply chains
  • Require pricing or sourcing strategy adjustments

Many companies are re-evaluating transfer pricing, supplier diversification, and tax planning in response.

3. Which industries are most impacted by Trump’s trade policies?

Industries most affected by Donald Trump’s tariffs include:

  • Manufacturing (automotive, machinery)
  • Consumer electronics
  • Agriculture
  • Textiles and apparel
  • E-commerce reliant on foreign sourcing

4. How can companies prepare for future Trump tariff changes?

Businesses should:

  • Monitor tariff policy updates closely
  • Develop flexible supply chains
  • Explore domestic or nearshore sourcing
  • Partner with financial advisors to implement tariff mitigation strategies

Wiss supports businesses with tax advisory and CFO strategy to navigate these changes effectively.

5. Do Trump tariffs apply to services or only goods?

Tariffs typically apply to imported physical goods, not services. However, trade policy changes can indirectly impact service sectors that rely on imported equipment, materials, or global clients.

6. Are Donald Trump tariffs permanent?

No. Trump tariffs are policy-driven and subject to change through legislation, executive action, or trade agreements. Their duration depends on geopolitical dynamics and compliance from U.S. trade partners.

Donald Trump Tariffs and Business Strategies

The evolving Trump tariffs update under Trump’s administration presents both challenges and opportunities for businesses. Key developments like the new U.S.–China agreement and temporary tariff suspensions offer some relief, but the potential for future adjustments adds layers of uncertainty.

By taking strategic steps like re-evaluating pricing policies, reframing Donald Trump tariffs as marketing opportunities, and exploring local suppliers, businesses can better weather this period of change. Staying agile and informed will remain the best response to an unpredictable trade environment. For broader insights, explore how New Jersey’s FY 2026 budget outlines evolving tax strategies that could intersect with national tariff policy.

Connect with our team for more of the latest information.

The Evolving Role of Financial Controllers: How Wiss Supports Their Transformation

Posted on by Kristine Sinisi

In today’s complex business landscape, the role of financial controllers is changing. No longer confined to the back-office functions of financial reporting, controllers are stepping into the spotlight as vital strategic partners. Embracing this transformation will help controllers ahead as the shift toward value creation and technological integration becomes not just an opportunity but a necessity.

This blog explores how controllers can reshape their roles to drive growth and innovation in their companies—and how Wiss can help them navigate these changes, even stepping in as a fractional controller to provide critical support.

Evolving Responsibilities

The transformation of the controller role is driven by the need to manage day-to-day accounting tasks and act as critical advisors to CFOs, influencing the strategic direction of their organizations. Wiss partners with controllers to help them adapt to these expanded responsibilities.

This support includes guidance on adopting new skills, navigating emerging technologies, and balancing operational duties with strategic initiatives. Wiss can provide fractional controller services, stepping in to ensure seamless operations and deliver high-level financial expertise during periods of change or growth.

Leveraging Technology

A significant aspect of this evolution is the use of advanced technologies. Controllers increasingly rely on artificial intelligence (AI) and other digital tools to enhance decision-making and value-creation capabilities. Wiss helps controllers integrate these technologies into their workflows, offering solutions that streamline operations and empower financial leaders to deliver timely, data-driven insights.

For instance, Wiss assists with setting up custom dashboards and analytics tools that provide real-time insights, allowing controllers to predict financial trends and make informed decisions. By automating routine tasks, controllers gain the bandwidth to focus on complex analyses, ultimately driving greater organizational value.

Fostering Strategic Relationships

Technology alone is not enough. Controllers must also foster robust relationships with CFOs and other business leaders to drive the value-creation agenda effectively. Wiss helps bridge these relationships by offering tools and processes that promote transparency and collaboration. Fractional controllers provided by Wiss can also act as liaisons, ensuring that financial insights are clearly communicated and integrated into strategic decision-making.

Wiss enables organizations to leverage their expertise in optimizing outcomes and guiding financial growth by involving controllers early in commercial decision-making processes.

Future Skills for Controllers

As the role of financial controllers expands, the skill set required evolves. Wiss supports controllers in developing strategic thinking, change management, and leadership competencies. Recognizing the increasing importance of soft skills, Wiss provides training and resources to help controllers articulate complex financial information persuasively, strengthening their ability to influence high-level decision-making.

Additionally, Wiss helps controllers stay ahead of global market trends, offering insights into economic shifts, regulatory changes, and technological advancements that could impact their industries.

Case Study: Wiss Helping Controllers Navigate Challenges

In one instance, Wiss supported a client’s controller who was facing significant operational challenges. The client struggled with implementing a new financial reporting standard under tight deadlines.

Wiss provided fractional controller support, alleviating the immediate burden and ensuring continuous financial oversight. Wiss also delivered customized training for the finance team, introduced a structured month-end close process, and revitalized a 13-week cash flow forecast to guide strategic decisions.

Through tailored reporting and a business insights snapshot, Wiss helped the organization gain clarity on key performance metrics and industry benchmarks. This comprehensive approach transformed a daunting compliance challenge into an opportunity for enhanced financial discipline and growth.

The Dual Pathway for Controllers

As financial leadership evolves, so does the career trajectory for controllers. Whether aiming for CFO roles or seeking to redefine the controller function, controllers benefit from deliberate development and succession planning. Wiss plays a vital role in this process, providing guidance, tools, and fractional support to prepare controllers for the next stage in their careers.

Empowering Financial Controllers to Drive Growth and Innovation

The evolving role of financial controllers represents a tremendous opportunity for organizations to drive growth and innovation. Wiss stands ready to help controllers navigate these changes, offering expertise, resources, and fractional services to support them every step of the way. By empowering controllers to embrace technology, build strategic relationships, and develop future-ready skills, Wiss ensures they are equipped to shape the financial future of their organizations.

With Wiss as a partner, controllers can confidently step into their expanded roles, driving sustainable growth and success.

Opportunity Zones Updates: What the ‘One Big Beautiful Tax Bill’ Means for You

Posted on by Michelle Antico

This week, the House Ways and Means Committee unveiled a draft of the “One Big Beautiful Tax Bill,” aiming to enhance and expand several tax benefits first introduced in the 2017 Tax Cuts and Jobs Act (TCJA).

While the draft doesn’t extend the current Opportunity Zone (OZ) provisions set to expire after 2026, it proposes a second round of Opportunity Zones. These updates are focused on improving access, ensuring transparency, and directing investments to distressed and rural areas.

Proposed Changes to Opportunity Zones

The new draft outlines several impactful updates for Opportunity Zones. Key features include an extended timeline, revised eligibility criteria, and simplified incentives for investors.

Extended Timeline and Stricter Eligibility

A second wave of Opportunity Zones would run from 2027 through 2033. This extension introduces stricter guidelines to ensure investments are focused on areas in genuine need. The new parameters mandate that:

  • At least 33% of all designated Opportunity Zones are located in rural communities.

This focus aims to ensure that rural areas receive proportional attention and resources, addressing gaps left by the initial legislation.

Simpler Incentives for Greater Participation

To attract more investors, the bill simplifies the incentive structure:

  • Investors would be eligible for a single 10% basis step-up after holding investments for at least five years.
  • In rural areas, investors receive a 30% basis step-up, but investments must be made through new “Rural Qualified Opportunity Funds” (RQOFs).
  • The “substantial improvement” threshold for existing properties in rural Opportunity Zones is reduced from 100% to 50%, making rehabilitation more feasible.

These adjustments are intended to make the program less complex while fostering growth in economically disadvantaged areas.

Inclusive Changes for Smaller Investors

The updated framework takes significant steps to expand participation, emphasizing inclusivity and transparency.

Easier Entry for Individual Investors

For the first time, smaller investors would have a clear pathway to contribute. Individuals would be allowed to invest up to $10,000 of post-tax income annually into Qualified Opportunity Funds (QOFs) or Rural Qualified Opportunity Funds (RQOFs). This shift opens doors for those who may not have participated previously, broadening the base of contributors.

Increased Transparency and Oversight

To ensure Opportunity Zones deliver meaningful benefits, the proposal introduces new oversight and reporting requirements. These measures will:

  • Track the impact of investments on local communities.
  • Improve public transparency and ensure accountability for project outcomes.

Enhanced reporting would help maintain focus on the program’s core mission of benefiting underserved areas.

Timeline for Implementation

If enacted, these changes would take effect on January 1, 2027, offering communities and investors an updated six-year framework that prioritizes impact-driven investment.

What the Changes Mean for You

These proposed updates aim to refine Opportunity Zones, providing greater focus on rural development while making participation more accessible. By simplifying investment incentives and increasing oversight, the program seeks to balance financial incentives with tangible benefits for communities in need.

Whether you’re already investing in Opportunity Zones or considering entering this space, these changes offer a renewed opportunity to align your financial goals with meaningful community improvements.

How We Can Help

We’re closely monitoring the progress of the “One Big Beautiful Tax Bill” and are ready to guide you through its implications. Whether you’re evaluating how the changes align with your strategies or looking for advice on future investments, we’re here to help.

Stay tuned for updates as this legislation evolves, and remember, thoughtful planning today can lead to both impactful and profitable opportunities in the future!

PTE Tax and SALT Cap Changes: Potential Impacts on Passthrough Entities

Posted on by Michelle Antico

When the Tax Cuts and Jobs Act (TCJA) of 2017 capped the State and Local Tax (SALT) deduction at $10,000, it sent ripple effects through the tax landscape, particularly for taxpayers in high-tax states. In response, many states created Passthrough Entity (PTE) tax workarounds to preserve some federal deductibility for their residents.

Now, with discussions in Washington about raising, repealing, or extending the SALT cap, it’s worth exploring how such changes might influence the effectiveness and future of PTE tax regimes.

What Is the SALT Cap?

Under pre-2018 tax law, taxpayers who itemized could deduct all their state and local taxes—income, property, and sales taxes—on their federal return. The TCJA changed that, limiting the deduction to $10,000 per year.

This cap hits hardest in high-income, high-tax states like California, New York, New Jersey, and Connecticut. Taxpayers in these areas saw their federal deductions shrink, effectively increasing their federal tax liabilities.

What Are PTE Taxes?

In response, many affected states enacted PTE tax regimes. Here’s how they work:

Passthrough entities (partnerships, S corporations, and LLCs) can elect to pay state income tax at the entity level.

This tax is fully deductible at the federal level as a business expense, sidestepping the SALT cap for individuals.

The entity’s owners then receive a state credit or deduction to prevent double taxation on the same income.

It’s a win-win under current rules: the state collects the same revenue, but the taxpayer gets a larger federal deduction.

How Would Changing the SALT Cap Affect PTE Taxes?

1. If the SALT Cap Is Repealed or Raised

  • Reduced Utility: If individuals can once again deduct most or all of their SALT, the benefit of electing into a PTE regime diminishes.
  • Lower Participation: Business owners may opt out of the PTE election, especially in cases where filing is complex or the benefits are marginal.
  • State Policy Reassessment: States may revise or phase out their PTE tax frameworks if they no longer provide a federal benefit.

2. If the SALT Cap Is Extended or Made Permanent

  • PTE Taxes Stay Valuable: In this case, PTE taxes remain one of the most effective workarounds to reduce federal tax for high-income individuals.
  • Broader Adoption: States that haven’t yet implemented a PTE tax (or only offer limited versions) may be incentivized to adopt or expand such regimes.
  • Increased Compliance Importance: CPAs and tax advisors will continue to play a crucial role in helping clients navigate these elections.

Practical Implications for Taxpayers and Advisors

Planning is Key: Business owners should coordinate closely with tax professionals each year to determine whether electing into their state’s PTE tax is still advantageous.

Monitor Federal Developments: Any change in SALT cap policy will directly impact the federal tax benefit tied to PTE elections.

Be Mindful of Each State’s Rules: PTE tax structures vary widely—some states allow full credits, others partial, and filing deadlines differ.

PTE Tax Strategies Amid SALT Cap Uncertainty

As Congress continues to debate the future of the SALT deduction cap, Passthrough Entity taxes remain a critical planning tool for affected taxpayers. Whether they remain a long-term or temporary solution depends mainly on how federal tax policy evolves.

Taxpayers and advisors alike should stay informed and agile, ready to adjust strategies in response to new legislation. In the meantime, the PTE tax continues to serve as a savvy workaround for those looking to navigate the limitations of the SALT cap.

Stay ahead of tax changes—consult with our advisors today to leverage PTE Tax strategies and maximize your savings.

House Tax Bill Analysis: What It Includes, What It Means, and Next Steps

Posted on by Michelle Antico

The House Ways and Means Committee recently unveiled a partial text of its proposed tax bill, introducing sweeping changes that form part of President Donald Trump’s agenda. This bill is expected to spark heated debates on Capitol Hill as it aims to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) while introducing new elements that could significantly impact taxpayers, businesses, and the national deficit. 

Below is a breakdown of what’s included, what it means for Americans, and what happens next. 

Key Highlights of the Proposed Tax Bill 

The proposed tax bill introduces several updates to the TCJA provisions and suggests a few new tax benefits. Here are the major highlights: 

Extension and Expansion of the TCJA Provisions 

  • The bill extends the TCJA tax cuts, ensuring lower tax rates for both individuals and businesses beyond 2025. 
  • Enhancements include raising the standard deduction, increasing the estate tax exemption, and expanding the 20% business deduction for pass-through entities. For example, the estate tax exemption would rise from $14 million to $15 million, and the pass-through deduction would increase from 20% to 22%. 
  • Temporary boosts, such as a four-year increase in the standard deduction (an additional $1,000 to $2,000 per filer), are also included. 

Child Tax Credit Expansion 

  • The child tax credit would increase to $2,500 per child through 2028 before dropping to $2,000 thereafter. Unlike previous versions, the bill requires claimants to provide a Social Security number to claim the credit. 
  • This proposal aims to provide additional relief to families, albeit temporarily. However, making these changes permanent could significantly add to the national deficit. 

Absence of Solutions for the SALT Deduction Cap 

  • The proposed bill notably omits any discussion about lifting or modifying the current $10,000 cap on state and local tax (SALT) deductions. This omission continues to be a contentious point, especially for high-tax states such as New York, New Jersey, and California. 

Exclusion of Campaign Promises 

  • Campaign pitches by President Trump, including eliminating taxes on tips, overtime pay, and Social Security benefits, were not part of this draft bill. These ideas are still under discussion but remain absent in the current text.

What Does This Mean? 

The proposed bill carries significant implications across various aspects of the US economy and taxpayers: 

For Taxpayers 

Low- and middle-income taxpayers stand to benefit from temporary increases to the standard deduction and child tax credit. However, without the SALT cap adjustment, taxpayers in higher-tax states may see limited relief. 

The extension of the TCJA ensures continued lower tax rates, but critics argue these temporary measures may set the stage for higher taxes if provisions expire. 

For Businesses 

Companies benefit from maintained low corporate tax rates and expanded deductions for pass-through entities. These measures aim to enhance competitiveness and growth opportunities for businesses, particularly small and mid-sized enterprises. 

For the Deficit 

The bill poses serious fiscal concerns. Preliminary estimates suggest it will add $4.9 trillion to national deficits over the next decade. If made permanent, this figure could exceed $5.5 trillion, increasing the US debt-to-GDP ratio beyond 134% by 2034. This potentially triggers economic challenges like higher interest rates and slower growth. 

For States 

The lack of resolution on the SALT deduction cap disproportionately affects residents in high-tax states. Lawmakers from these regions may push for amendments before the bill progresses further. 

Challenges and Next Steps 

The bill faces numerous hurdles before becoming law. Among them:  

1. Addressing the Deficit Consequences 

With projected deficits far exceeding acceptable thresholds, lawmakers need to weigh the trade-offs by either reducing spending cuts, increasing revenue through offsets, or scaling back proposed tax breaks.

2. Gaining Bipartisan Support 

Though the bill can pass through reconciliation with a simple majority, the Republican caucus remains split between moderates, who seek more balanced legislation, and fiscal conservatives, who advocate for aggressive reductions in federal spending.

3. Finalizing Details 

The current draft is expected to undergo significant revisions, with additional text likely introduced in the coming days. Contentious issues like Medicaid funding and clean energy tax credits will likely resurface during these debates. 

4. Managing Public Sentiment 

Controversial provisions, coupled with concerns about sustainability, could invite scrutiny from voters, especially with elections approaching. 

Understanding the Impact of the Proposed Tax Bill

The proposed tax bill represents a significant step in Republican lawmakers’ efforts to solidify President Trump’s economic legacy while addressing elements of the modern economy. While these sweeping changes hold promise for economic growth and taxpayer relief, they also risk ballooning the national deficit and exacerbating disparities. 

The next steps involve intense negotiations, as Congress debates how to refine the text and balance fiscal responsibility with economic opportunity. Lawmakers and citizens alike will be closely watching this process as it unfolds. 

Tax bills like this one have profound impacts—not just on your wallet but on the broader economy. To stay informed on tax legislation and understand how it might affect you, consider consulting a financial expert or accountant for tailored advice. 

Digital Assets in Estate Planning

Posted on by Michelle Antico

When we think about someone’s estate, tangible assets like real estate, jewelry, and stock portfolios often come to mind. However, in our increasingly digital world, digital assets in estate planning are becoming just as crucial to consider. The value of these assets often extends beyond monetary worth, encompassing sentimental significance, privacy concerns, and legal intricacies.   

This article delves into the often-overlooked realm of digital assets in estate planning, offering strategies to ensure their seamless transfer and avoid unnecessary challenges for your beneficiaries.   

Understanding Digital Assets   

1. Overview of Digital Assets   

Digital assets include a wide array of files, accounts, and information that exist online or on electronic devices. They may range from cryptocurrencies and NFTs to passwords, email accounts, and social media profiles. As these assets become more integrated into daily life, their importance in estate planning cannot be overstated.   

2. Importance of Estate Planning for Digital Assets   

Without proper management, digital assets can quickly become inaccessible or lost after one’s passing. This not only risks the financial value of these assets but also places an emotional and legal burden on loved ones. Estate planning ensures proper access while respecting your privacy and intentions.   

3. Types of Digital Assets   

Key categories of digital assets include: 

  • Financial Accounts such as cryptocurrency wallets, online banking, or investment accounts.   
  • Personal and Sentimental Assets like family photos stored in the cloud, email accounts, and social media profiles.   
  • Business Assets such as domain names, digital intellectual property, or stored contracts.   
  • Monetized Platforms, including YouTube channels, blogs, or accounts generating passive income.   

4. Common Challenges in Managing Digital Assets  

Navigating digital assets presents unique challenges: 

  • Access Restrictions due to passwords, two-factor authentication, or terms of service agreements. 
  • Changing Laws regarding digital inheritance and privacy. 
  • Lack of Awareness as digital assets are often overlooked in traditional estate planning conversations. 
  • Valuation Difficulties for assets like cryptocurrency or NFTs, which can be volatile and complex to assess.   

Estate Planning Strategies   

1. Inventorying Digital Assets   

The first step in planning for digital assets is cataloging everything. Create a detailed inventory of: 

  • Account usernames, passwords, and recovery instructions. 
  • Specific assets like cryptocurrency wallet keys or ownership records for NFTs. 
  • Any recurring income streams from digital sources.   

Store this list securely, either in a physical safe, a password-protected document, or a secure digital vault.   

2. Creating a Digital Asset Plan   

A standalone digital asset plan complements your estate plan. This includes instructions about: 

  • Who should have access to your digital accounts. 
  • Which accounts should be archived or deleted. 
  • How digital income streams should be managed or transferred.   

Make sure this plan is regularly updated to reflect any changes in your asset portfolio or login credentials.   

3. Incorporating Digital Assets into Wills and Trusts   

Addressing digital assets in your will ensures they’re included in your broader estate plan. However, not all digital assets are covered by wills alone due to privacy laws or platform-specific restrictions. Trusts can be an effective way to transfer ownership while preserving privacy and legal compliance.   

For instance, platforms like Facebook or Google have legacy settings allowing you to assign a trusted individual to manage your accounts after death. Address these settings as part of your overall strategy.   

4. Privacy and Security Concerns   

There are always heightened risks of identity theft or cybercrime to think about as well. To mitigate these dangers: 

  • Use encrypted storage or password management tools to secure login information.   
  • Work with legal and financial professionals experienced in digital estate planning.   
  • Review terms of service policies to understand how different platforms handle account transfers or deletions upon death.   

Moving Forward with Confidence   

The rise of digital assets has transformed how we view wealth, ownership, and legacy. Ensuring that your digital assets are accounted for in your estate plan is both a strategic and thoughtful choice. Begin by inventorying your assets, creating a comprehensive digital strategy, and incorporating these elements into your will or trust.   

To ensure your digital assets are seamlessly integrated into your estate plan and your legacy is preserved, contact the experts at Wiss. Our team has the expertise and insight to guide you through the complexities of digital estate planning and help you create a strategy tailored to your unique needs. Reach out to us today and take the first step towards safeguarding your digital legacy! 

Navigating a FAR Audit: Wiss Ensures Compliance

Posted on by Kristine Sinisi

A women-owned full-service cultural resource management firm, the Company has grown into one of the largest independent archaeological and historic preservation consulting firms in the United States. Their mission is to guide clients through compliance with federal, state, county, and municipal cultural resource and historic preservation regulations, ensuring responsible development.