I have seen a lot of chatter online lately between SEOs about how the new U.S. tax laws will affect them. I have been having an ongoing conversation about this issue with our long-time accountant, Ed Borine, and I figured it might be of interest to share what he has been advising us. It’s all about optimization right?
Warning, this post should not be construed as actual tax advice. This is purely clickbait entertainment. If you want actual tax advice, consult with a tax professional.
TL;DR How To Maximize Your Pass Through Income Tax Deduction
- LLCs should consider shifting to a subchapter S corporation, sole proprietorship or partnership
- If you have employees, shift as much expenses to W2 wages as possible
- Reduce your salary to minimize salary income and maximize profits
- Sole proprietors should consider setting up a tax shelter vehicle
- Hire a good accountant
The focus on my discussion with Ed has been how to take advantage of the tax credits for Qualified Business Income. I am going to start with some exposition and then move on to how we can milk this thing for all it’s worth. Read On…