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Qualidied Business Income

A Possible Reduced-Rate Roth Conversion for Business Owners

Reduced Rate Roth Conversion

Here’s an idea that can be very powerful for some business owners.  The 2017 Tax Act provides business owners with a 20% deduction on their business profits (Qualified Business Income or QBI).  The catch is that the 20% is applied to taxable income if that’s lower.  In other words, if taxable income is going to be lower than QBI, then you miss the opportunity to have some income that will receive a 20% deduction. Therefore, if you accelerate income, some of the cost of doing so will be eliminated by the increase you are creating with a larger QBI deduction.  […]

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Three Practical Tax Steps

Three Practical Tax Steps

In our last post, we detailed many of the new individual and corporate tax laws. Here we’ll take a closer look at three practical steps you should consider taking in light of these. 1. Revisit the income tax classification of your corporation or LLC. For decades now, the S corporation has been the income tax classification of choice for most non-real estate businesses. The fact that it offers a single level of tax versus “double taxation” in C corporations has mostly been the deciding factor. Now, while C corporations still expose their owners to double tax (first on corporate income […]

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