Amanda Garcia

QBI deduction: what business owners should know The qualified business income (QBI) deduction allows eligible owners of sole proprietorships, single-member LLCs, partnerships, and S corporations to deduct a percentage of qualified business income. Under prior law, the deduction was generally up to 20% and was scheduled to expire after 2025. A note for SSTB businesses If you are in a specified service trade or business (SSTB), your structure decision gets more nuanced. SSTBs generally include...

The flip side: cons of an S election A common story I encounter is when a new client comes to me and said that they have already made the S election for their business. At this point I usually cringe a little because they took very general advice from the internet and not usually a qualified CPA who knows their specific facts. The S election is great, but it works better for some fact patterns than others. Let’s dive in to the downsides of making the S election. You will notice a theme is...

Should You Make an S Corporation Election? Pros, Cons, and Who Benefits Most Choosing your business entity is not just a legal decision, it’s also a tax strategy decision. For many business owners, an S corporation election can reduce taxes, offer reimbursement arrangements (i.e. accountable plan) and create planning opportunities. It also adds complexity. You may need to run payroll and file your payroll taxes, pay yourself as an owner-employee, file a separate business tax return (Form...