Getting the most of this course
Section 1: Definitions
Basic definitions commonly used in tax planning
Section 2: Tax Law Changes
Discussion of some of the 2018 tax law changes
- Tax law changes excel template
- Personal Standard Deduction
- Tax Rate Changes – Individual
- Tax Rates – Corporation
- Moving expenses
- Medical expenses
- Mortgage interest
- State taxes
- Casualty loss
- Miscellaneous itemized deduction
- Child tax credit
- Opportunity Zones
- Employee credit for paid family and medical leave
- Tax Law Change Quiz
Section 3: Qualified Business Income Deduction
QBI- new deduction for 2018
Section 4: Tax Planning
Section 5: Tax issues specific to married entrepreneurs
Section 6: Multi year tax planning issues
Tax issues for entrepreneurs making under 157.5K (single), 315K (married)
If you make less than 157.5 K (single) or 315k (married), then your qualified business income deduction is not limited.
However, at this income level, there are other things you should consider besides the qbi deduction.
At this level, it is worth considering an entity change. Take a look at the tax liability of a married taxpayer making 100k.
As a schedule c taxpayer, he/she pays $20,366.33, as a scorp pays $6,881.64 and as a c corp pays $14,099.53 in taxes. We see the s corp creates the least tax liability.
Number of children
The number of children you have can also affect your entity choice. As a c corporation, you pay taxes through 2 entities: the corporation and your individual tax return. Since your business income is taxed as a separate entity, only the amounts you compensate yourself will be taxed on your individual tax return. This could potentially decrease your tax liability, especially if you have children. Running a test to see if running as a c corporation will be better for you is worth taking a look at.
If running as a c corporation, it is important you pay yourself a reasonable wage.
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