2019 LLCs: Reducing Self-employment Tax and Maximizing the 20% Passthrough Deduction

Author: Greg White

How Can You Maximize the Qualified Business Income Deduction for LLCs?
Join experienced tax practitioner Greg White, CPA, for this two-hour CPE course providing a broad overview of self-employment tax application to LLC members, including up-to-the-minute changes in this fast-changing area.

Greg will also cover how the Tax Cuts and Jobs Act affects decision-making in gray areas, and when LLC’s provide a better tax result for owners. You will learn how LLC’s can be used to increase the qualifying business income deduction (20% passthrough deduction). And we’ll cover how LLC’s should consider changing the guaranteed payment structure to increase the new 20% passthrough deduction. Greg will also explain the benefits of paying SE tax (an often-overlooked element of planning).

Publication Date: August 2019

Designed For
CPAs, EAs, and those with experience in income tax issues for passthrough entities including preparation of Forms 1065 for LLCs

Topics Covered

• Business Requirement
• Reasonable Compensation
• General Partners
• Limited Partners
• LLC's Haziness
• Test 1, 2 & 3
• Piggybacks
• Can Just One Spouse Be a "Limited Partner"?
• SE Losses Are Usually Good!
• SE Tax for LLC Members
• What's the Cost in Lost Social Security Benefits?
• QBID Overview
• QBID Phase Outs (High Income Taxpayers)
• S Corp or LLC?

Learning Objectives

• Recognize when self-employment tax doesn't apply to LLC members
• Identify and apply self-employment principles to LLC members
• Describe how to maximize LLC's 20% passthrough deduction
• Recognize how to adjust guaranteed payments to maximize the 20% passthrough deduction
• Identify exceptions to SE tax for LLCS
• Identify one of the relationships Dr. Hardy had with the surgical center
• Recognize an IRS guidance situation wherein the IRS not discussed the impacts
• Describe characteristics of the new QBID (i.e. new §199A) deduction
• Identify the full phase in amount for QBID
• Recognize what should be considered for business purposes of SE tax
• Identify what activity must be to be a business, affirmed by the Supreme Court
• Differentiate court cases and how they apply to your clients
• Describe the two prerequisites all SE tax limited partnership rules in the proposed regulations must have
• Recognize what amount you should divide net income by, in order to determine the optimal amount of wages for QBID
• Identify characteristics of LLCs

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Experience in preparing Forms 1065 for LLCs.

Advance Preparation
None