Tax Planning & Advisory

Quick Answer

• NJ's Business Alternative Income Tax (BAIT) is an annual pass-through-entity election. Qualifying BAIT paid may be deducted in computing income on the entity's federal return, while each eligible owner claims the prescribed refundable credit on the owner's NJ return. The combined result depends on the entity and owner returns, QBI, credits, and costs; no benefit is promised. The elevated individual federal SALT cap is temporary through 2029. For 2025/2026, the cap is $40,000/$40,400 ($20,000/$20,200 MFS), phases down above MAGI of $500,000/$505,000 ($250,000/$252,500 MFS), and cannot fall below $10,000 ($5,000 MFS); current law returns to the ordinary $10,000/$5,000 cap in 2030.
• Quarterly estimated taxes are due April 15, June 15, September 15, and January 15. Federal rules generally apply at $1,000 or more after withholding and credits; NJ rules generally apply when expected tax due after withholding and credits is more than $400.
• The QBI deduction under IRC §199A allows eligible pass-through business owners to deduct up to 20% of qualified business income - the OBBBA made this provision permanent starting in 2026.
• Completed Roth conversions can have different federal and NJ return treatment because NJ basis may differ from federal basis. This is general education: Monaco CPA does not recommend conversions, perform Backdoor Roth analysis, or provide individualized IRA strategy; accepted retirement-account work is limited to return treatment and contribution-limit reporting for a client-established account.
• Bunching charitable deductions into alternating years can help NJ taxpayers exceed the federal standard deduction threshold in 'on' years, maximizing the itemized deduction benefit.