2018 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 2018

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

Topics Covered

• Which LLC members are subject to self-employment tax
• How does self-employment tax apply to spouses of LLC members
• The IRS's new audit campaign for self-employment tax of LLC members
• How to minimize self-employment tax for LLC members
• Which members benefit from paying self-employment tax
• How to adjust guaranteed payments to maximize the 20% passthrough deduction

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 LLC's
• Calculate the costs of lost social security benefits
• Differentiate characteristics of the new QBID deduction
• Identify the full phase in amount for the QBID for those individuals filing as single
• Describe business for purposes of SE tax
• Identify decisions from court cases and how they apply to clients
• Recognize prerequisites of SE tax limited partnership rules in proposed regulations
• Identify what should be done next after calculating costs of lost social security benefits
• Recognize and apply §199A QBID deductions

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