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 over 157.5K (single), 315K (married)
If you are taxpayer making over 157.5 k if single or 315k if married, then your qualified business income deduction (QBI) will be reduced.
Strategy for entrepreneur with general business over 415k
When income exceeds $415,000 for married filing jointly and $207,500 for other filing statuses , your deduction for QBI cannot exceed the greater of:
- 50% o W-2 wages paid with respect to the qualified trade or business,
- The sum of 25% of such wages plus 2.5% of the unadjusted basis immediately after buying the asset.
If you are above this limit, it is recommended to do an analysis to find out:
- If being a c corporation will be better for you, especially if you are specified business. The change in tax liability could be quite huge.
- If paying yourself more wages will be helpful
Take a look at this sample analysis for an entrepreneur making 350k. On the left he chose to pay no wages and on the right he paid 50k in wages saving him over 6k in taxes.
You can download more sample analysis here.