Q: Can the 10.5% GILTI regime really beat an S-Corp for a small-business owner? A: Only in very specific circumstances. It can win if you’re a high-earning US expat who…
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,…
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…
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…
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…
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…
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,…
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,…
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…
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…