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Do You Need to Switch to an S Corporation Now to Realize the New 20% Deduction?

January 12, 2018

Because of tax reform, I’ve got three important questions for you:

Do you currently file your taxes as…

  • A Schedule C taxpayer because you receive 1099s?
  • A Single-member LLC?
  • A proprietorship?

If you do fall into one of these categories, you can qualify for a new tax deduction equal to 20% of your qualified business income under new tax code Section 199A but only if your taxable doesn’t exceed certain levels.

If you are over the limits, you may have a huge planning opportunity with the S corporation as your business entity. Want to find out if you need the S corporation to qualify for your 20% deduction under this new 2018 law?

Easy! Read my new article titled Tax Tips: Tax Reform: Entity Choice—Proprietorship or S Corporation?

Three ways our fact-filled article can help you:

  1. We’ll explain the very real problem you face. If your taxable income is too high and you don’t have a payroll (or own depreciable property), you could wind up with a zero deduction. You’ll get all the details when you read the full article.
  2. You’ll learn why the S corporation can come to your rescue. If you form an S corporation, you create two benefits that can save you a lot of money. For starters, you’ll save on your self-employment taxes. Plus, you’ll be eligible for a Section 199A 20% deduction! All will be explained when you read the full article.
  3. We’ll tell you how to take full advantage of the Section 199A 20% deduction. As mentioned, the combination of your (a) qualified business income, (b) taxable income, (c) W-2 wages paid, and (d) depreciable property owned can combine to give you a Section 199A tax deduction of zero. But if you run the numbers and play your cards right, you can use the S corporation to save you a lot of money. We’ll show you how to do the easy calculation when you read the full article.

Filed Under: Choice of entity, Corporations, Filing tips, Legislation, Tax Planning, Tax Policy

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