Tax & Business Insights

Q: Can the 10.5% Net CFC Tested Income (NCTI) regime really beat an S-Corp for a small-business owner? A: Only in very specific circumstances. Under the Net CFC Tested Income (NCTI – formerly GILTI), the structure can win if you’re a high-earning US expat who (1) routes profits through a US C-Corp that owns a bona fide foreign subsidiary, (2) […]

Q: Is electing a state Pass-Through Entity Tax (PTET) always a smart SALT-cap workaround? A: Almost always – but not universally. PTET converts state tax into a deductible business expense, cutting federal tax. It can backfire only in edge cases, mainly when (1) you already get the full SALT benefit on Schedule A or (2) […]

Q: Can I avoid self-employment tax on partnership profits by having an S-Corp own my LLC interest? A: Yes – if structured correctly. The S-Corp pays you a reasonable salary (subject to payroll tax) and passes the remaining income as distributions that escape self-employment tax. But the entity must have real business purpose, pay reasonable […]

Q: Can I avoid my home-state income tax by registering my business in a no-tax state like Wyoming or Nevada? A: No. Your resident state taxes income where you live and work, regardless of where the entity is registered. Only changing legal residency and shifting business activity can eliminate that tax. TL;DR: Pass-through income follows […]

Q: How do I determine a “reasonable salary” for my S-Corp? A: Start with what you’d pay an unrelated employee to do your job, then adjust for profit, duties, time spent, and local market data. Pay at least that amount as W-2 wages; treat the rest of the profit as distributions. Too low invites IRS […]

Q: Can I deduct expenses that provide a personal benefit – like business suits, cosmetic work, therapy, or pet care? A: Almost never. The IRS allows a deduction only when a cost is both “ordinary & necessary” for the business and provides no personal benefit that’s adaptable to everyday life. Rare exceptions exist but require […]

Q: Does moving income through a licensing agreement between my S-Corp and a C-Corp safely reduce tax? A: Only if it’s real. The deal must serve a bona-fide business purpose, charge arm’s-length royalties / commissions, and be fully documented – otherwise the IRS can disallow the deduction and you could end up paying tax on […]

Q: Does pairing a C-Corp with an S-Corp actually lower your overall tax bill? A: Only in narrow cases. Splitting income lets you defer the second layer of C-Corp tax, but you must leave profits inside the C-Corp for years and avoid Accumulated Earnings Tax penalties. TL;DR Defers double taxation only if profits stay in […]

Q: Does the 21% corporate tax rate make a C-Corp cheaper than an S-Corp? A: No. After double taxation and lost pass-through benefits, most owners pay more overall with a C-Corp. TL;DR Corporate tax (21%) plus dividend tax (up to 23.8%) usually exceeds a top-bracket S-Corp rate. You lose the 20% QBI deduction and state […]

Q: What happens to my taxes when the Tax Cuts and Jobs Act expires after 2025? A: They almost certainly go up. The 20% QBI deduction vanishes, tax brackets shift higher, AMT thresholds plunge, the standard deduction shrinks, and dozens of “temporary” breaks end – unless Congress extends the legislation. TL;DR QBI gone. Pass-through owners […]

2025 and all of its tax deadlines are upon us! Below is a quick guide of the most important dates to keep in mind this calendar year. January 15th: due date to pay 4th quarter estimated taxes. January 31st: Due date to send out 1099s and W-2s to recipients. Due date to file 1099-NECs and […]

2024 and all of its tax deadlines are upon us! Below is a quick guide of the most important dates to keep in mind this calendar year. January 16th: due date to pay 4th quarter estimated taxes. January 31st: Due date to send out 1099s and W-2s to recipients. Due date to file 1099-NECs and […]

“How much you want to make a bet I can throw a football over them mountains? Yeah. If coach would’ve put me in fourth quarter…we’d have been state champions, no doubt. No doubt in my mind. You better believe things would have been different. I’d have gone pro…in a heartbeat. I’d be making millions of […]

We offer an extremely flexible work environment – both in terms of schedule and work-from-home opportunities. With that, the person taking this job will need to be a self-starter and able to manage themselves. We are generally here as resources for when employees need assistance, but otherwise people generally go about their day-to-day autonomously. Anyone […]

2023 and all of its tax deadlines are upon us! Below is a quick guide of the most important dates to keep in mind this calendar year. January 17th: due date to pay 4th quarter estimated taxes. January 31st: Due date to send out 1099s and W-2s to recipients. Due date to file 1099-NECs and […]

“He was able to turn out thousands of paintings over his lifetime while his contemporaries were lucky to turn out a hundred” – Mike Michalowicz discussing Sir Peter Lely A while back I was talking with a friend and client (Mitch Wilder) about how I’ve been feeling increasingly underwater lately. The firm has continued to […]

Calling all talented TAX ACCOUNTANTS who want MORE. We’re looking for the best and brightest tax expert to join us. And not just as a salaried tax accountant/tax manager, but also with production bonuses as well.

2022 and all of its tax deadlines are upon us! Below is a quick guide of the most important dates to keep in mind this calendar year. January 18th: due date to pay 4th quarter estimated taxes. January 31st: Due date to send out 1099s and W-2s to recipients. Due date to file 1099-NECs (formerly […]

“Your pain is the breaking of the shell that encloses your understanding. […] Much of your pain is self-chosen. It is the bitter potion by which the physician within you heals your sick self. Therefore trust the physician, and drink his remedy in silence and tranquility”  – On Pain by Kahlil Gibran   This past […]

2021 and all of its tax deadlines are upon us! Below is a quick guide of the most important dates to keep in mind this calendar year. January 15th: due date to pay 4th quarter estimated taxes. February 1st: Due date to send out 1099s and W-2s to recipients. Due date to file 1099-NECs (formerly […]

“I don’t think I ever sang the same way twice. And I don’t think I ever sang the same tempo. One night is a little bit slower and the next night is a little bit brighter. It depends on how I feel. I don’t know, blues is sort of a mixed-up thing. You just have […]

That was my absolute favorite song for most of my teenage years. I had a visceral reaction to it and it touched me on a deep level. Because it matched what I was going through at the time (or at least what I thought I was going through – “love” at that age is quite the mercurial thing.)

Longtime readers will remember that I have a more favorable view on debt than most – the right types of debt that is. We’ve written about the dangers of excessive debt, but more often have talked about how the intelligent use of debt can be quite advantageous (examples can be found here, here, and here). […]

There’s a term in competitive gaming called “Elo hell”. The phrase comes from the Elo ranking system, which was originally created for chess matches in an attempt to match players of similar skillsets to play against each other. The ranking system has since been used by participants in board games, sports leagues, and a number […]