Strategies to play the new tax law
One of the most notable provisions in the Tax Cuts and Jobs Act is a 20% deduction for qualified business income from so-called pass-through entities, including S corporations and limited liability companies (with some limitations).
Accountants and entrepreneurs are getting creative in ways to help businesses get the most out of tax breaks. Here are a few strategies:
- Spin out an asset – create two separate, yet related, companies.
- Reasonable pay – play with salary versus profits.
- Redefine expertise – are profits related to the skill or reputation of the employees? (There is potential for boundary shifting on this.)
- Saving for retirement – if you are over the 20% deduction, consider increasing your savings for retirement.
Read the full article on USAToday.com.
USAToday.com & CNBC
One way to play the new tax law: Start an LLC
By Darla Mercado, CNBC, Jan. 26, 2018