The Tax Cuts and Jobs Act made a number of changes that affect multi-member partnerships and LLCs. Most of these changes will put a smile on your face, but a few may cause some frowns. How will your business fare under the new law? We’ll tell you the good, the bad, and the ugly when you read my new article titled Tax Tips: TCJA Changes Affecting Partnerships and LLCs and … [Read more...]
Choice of entity
Sorted by Date
An S corporation “reasonable compensation” alert
As we’ve mentioned in past issues of the Tax Reduction Letter, there’s good news for S corporation owners: Tax reform gives you a new 20-percent Section 199A deduction on pass-through income. But be aware… The IRS requires that you pay yourself “reasonable compensation.” If you don’t, you can torpedo your deductions and be forced to pay extra taxes and penalties. Want … [Read more...]
Don’t let business losses make you an IRS target
It’s a fact… The tax law has always treated your hobby activities unfairly. Now, tax reform under the Tax Cuts and Jobs Act has made things even worse. You see, thanks to this new legislation, you’re prevented from deducting any business expenses against hobby income. That’s right. Tax reform has turned your tax-law-defined, not-for-profit hobby activity into an unfairly … [Read more...]
S Corporation Fringe Benefits after the Recent Tax Reform
The recently passed tax-reform law has a lot to say about fringe benefits for shareholder-employees who own more than 2-percent of their S corporations. The good news? Federal tax law lets you treat the cost of fringe benefits as deductible expenses for your S corporation. The bad news? If you’re a more than 2-percent shareholder, you may have to pay additional taxes … [Read more...]
Tax Reform Increases the Tax Benefits of Employing Your Child
Sure. Tax reform has had its downsides, but it also provides some substantial money-saving benefits for business owners. For example, if you (or you and your spouse) own a business, your children can dramatically increase tax benefits for both you and them. That’s a win/win situation too good to pass up! Want to find out how to put a totally legal “hire your child” strategy … [Read more...]