Posted January 15, 2018
The Watson CPA Group and Jason Watson have released the 2018 Edition of Taxpayer’s Comprehensive Guide to LLCs and S Corps. 320 pages of pure pleasure! We went through a major revision following the Tax Cuts & Jobs Act of 2017 including Section 199A deductions for small businesses. Yeah, no kidding.
We have several examples showing how the Section 199A works, why S corporations remain a great tool for tax savings and why reverting to a C corporation is a bad idea. We also express questions about old school Schedule C deductions and business combinations (owned by the same person / entity) where one business qualifies for the Section 199A deduction and the other does not. Frankly the Section 199A stuff is only about 25 pages of the material… the rest is good ol’ fashion business stuff!
It is available in paperback for $24.95 from Amazon and as an eBook for Kindle for $17.95. Our book is also available for purchase as a PDF from ClickBank for $12.95. Why do we all love 95 cents? We all know that 12.95 is really 13 bucks. At least we are not like gas stations… $12.949. Silly! Yet we digress. Apple iBook, Barnes and Noble Nook, among others are being updated… since these formats are more “static” and given the quantity of revisions, etc., we are delaying these file formats.
Before you spend your money, we encourage you to review the highlights below and download a sample of Taxpayer’s Comprehensive Guide to LLCs and S Corps by using the following button-
But if you saying to yourself, “Self, just get the darn book and start taking care of business” then click on one of the buttons below-
Here are some testimonials to make you feel better (of course we only picked the good ones… just like referrals)-
Ronny R. says, “I enjoyed it! Gave me lots to talk about with my CPA.“
Britt S., Esq. says, “Thank you so much for speaking with me last week! You are amazing and I greatly appreciate all of the information you emailed me. I am in complete adoration of your book!”
Lisa A. says, “Detailed information about the pros and cons of creating a small business. Lots of great detail about the tax benefits and consequences. NOT a ‘dummies’ book – it assumes you already have some background knowledge.“
Brett B. says, “I read your ‘Comprehensive S Corp’ book. Wow. You blew my mind. I thought I understood S Corps.”
Larry M. says, “I found it helpful, but could have gone into a little more detail. There is one main way to save money as an s corp, and how to determine ‘how much you can get away with’ could have been expanded on a bit more. Otherwise, pretty good guide.“
M.S. says, “Great read for first time self-employed corp owners. Covers all the main basic of taxes and caveats. Well written and simple to understand for those not well versed in tax law.“
If you buy our 308-page book and think that we didn’t help you understand small business tax law or the benefits of S corporations, let us know. We never want you to feel like you wasted your money. If you are ready to add some insightful reading into your day, click on one of the preferred formats. Amazon is processed by Amazon, and the PDF is safely processed by ClickBank who will email you the PDF as an attachment.
Warning- we are in the middle of converting to MOBI and EPUB eBook formats (painful), so please use the Amazon (paperback) and PDF buttons below-
We can send you the eBook formats once our conversion is completed (around January 2018) at no charge if you have already purchased the paperback or PDF versions. Simply email us for your courtesy copy.
Section 199A Pass Thru Tax Reform
Section 199A deduction also known as the Qualified Business Income deduction arises from the Tax Cuts & Jobs Act of 2017. This is a significant tax break for small business owners but there are rules and limits of course. We have written a short article which outlines what is considered a qualified business for the qualified business income deduction including the dreaded specified service trade definitions (which is easily summed up as “any trade or business where the principal asset is the reputation or skill” of the owner). Click on the button below for our article-
S corporations remain a critical tax saving tool for two reasons. First, the usual self-employment tax savings remains intact for all business owners including specified service trades or businesses. Second, a business owner might need to pay W-2 wages to himself or herself to not be limited by income, and only corporations can pay W-2 wages to owners (in other words, an LLC cannot without an S Corp election). Read the article above for riveting information!
This information is also incorporated into our book including examples and calculations. Happy Happy Joy Joy!
Current release is 2018 Edition which includes the Tax Cuts & Jobs Act of 2017 and Section 199A deductions for small businesses. We might have additional updates as the IRS provides further guidance. Please email us to let us know you want an updated version, and we will ship free of charge.
We have not updated Chapter 8 on Tax Deductions and Fringe Benefits with the new tax laws. Frankly we have been a bit busy with the Section 199A deduction which is much more of a needle-push than other changes. And… we are a tiny 20-person firm gearing up for tax season. Two big notables- meals and entertainment has shriveled under the new laws, and automobile depreciation has increased. There are some other minor things and we’ll update as soon as we can.
S Corp Benefits
How can I avoid self-employment taxes? This simple question was the inspiration for creating an article describing the benefits of an S Corporation. That original article, which was about four pages long, quickly became a series of KnowledgeBase articles on the Watson CPA Group website. The articles touched on basic topics such as how to elect S Corp status, shareholder payroll, reasonable salary determination and liability protection. Those broad topics demanded much more information, both horizontally by spanning into more related issues, and vertically by digging deeper into the granular yet riveting levels of the tax code. Beyond general S Corp benefits, our 2018 edition of this book will show you-
- The Fallacy of Nevada Corps
- State Taxes, Nexus, FBA Problems, and Liability
- S Corp Benefits, Tax Savings
- Avoiding Self-Employment Taxes
- The 185 Reasons an S Corp or LLC Might Stink
- Forming and Operating an S Corp
- Late S Corp Election
- Determining Reasonable S Corp Salary
- Section 199A Business Tax Deduction
- Tax Deductions, Fringe Benefits, Kids on Payroll and Cars
- Properly Paying for Health Insurance
- Small Business Retirement Planning with Your S Corp
- Business Valuation and Exit Strategies
Each week we receive several phone calls and emails from small business owners and other CPAs across the country who have read our Taxpayer’s Comprehensive Guide to LLCs and S Corps and praised the wealth of information. Regardless of your current situation, whether you are considering starting your own business or entertaining a contracting gig, or you are an experienced business owner, the contents of this book are for you.
This book is written with the general taxpayer in mind. Too many resources simply regurgitate complex tax code without explanation. While in some cases tax code and court opinions are duplicated verbatim because of precision of the words, this book strives to explain many technical concepts in layperson terms with some added humor and opinions. We believe you will find this book educational as well as amusing.
Here are some additional resources-
S Corp Package
The Watson CPA Group specializes in S corporations which have a small number of shareholders, and often just a one-person show. Did you know that 95% of all S Corps have only one shareholder, and 99% of all S Corps have three or fewer shareholders? Small business owners is all we do!
Because it is a core competency for us, we have created an S corp package that includes the following (No, the S doesn’t stand for stormtrooper)-
|S Corp Reasonable Salary Calculation (sample RCReports)||Yes||Yes||Yes||Yes|
|Section 199A QBI Tax Optimization (more info)||Yes||Yes||Yes||Yes|
|S Corp Payroll Filings and Deposits||Yes||Yes|
|Annual Processing (W2s and other filings)||Yes||Yes|
|S Corporation Tax Prep (Form 1120S)||Yes||Yes||Yes||Yes|
|Individual Tax Prep (Form 1040), One Owner||Yes||Yes|
|Estimated Tax Payments (done thru payroll or directly by us)||Yes||Yes||Yes||Yes|
|2018 Tax Planning, Mock Tax Returns (Questionnaire)||Yes||Yes||Yes||Yes|
|Unlimited Consultation and Periodic Business Reviews (PBR)||Yes||Yes||Yes||Yes|
|First Research Industry Reports (sample report)||Yes||Yes||Yes||Yes|
|Small Business Tax Deductions Optimization||Yes||Yes||Yes||Yes|
|Solo 401k Plan (more info)||Yes||Yes||Yes||Yes|
|IRS Audit Defense||Yes||Yes|
Couple of things to keep in mind- we make very little profits on payroll processing… we offer it as a convenience to our clients. One throat to choke with a single call can be reassuring but if you want to run your payroll, go for it!. And… the benefit of the Watson CPA Group preparing both tax returns is that we slide things around depending on income limitations, phaseouts, alternative minimum tax (AMT), etc. Having our arms around both can yield some good tax savings!
Some more things to consider- Since only a partial year remains, our usual annual fee is pro-rated to not charge you for services you didn’t use (like payroll and consultation). However, a large chunk of our annual fee is tax preparation which is typically a fixed amount of $1,300 (both corporate and personal). Whether we onboard you in January, July or December, we have to prepare a full year tax return. This increases the monthly fee for the remaining months of 2018 but the monthly fee will later decrease in January of 2019 to reflect the amounts above. Yeah, we make it sound like 2019 is just around the corner.
Section 199A Deduction Optimization
Section 199A is a derivative of the recent Tax Cuts & Jobs Act of 2017. In a nutshell, business owners including rental property owners will enjoy a 20% deduction based on the qualified business income. There are limitations based on income, W-2 wages and depreciation. As a result, there is some optimization that is necessary for a small business owner to get the most from the Section 199A deduction. On one hand we want to reduce W-2 salaries to shareholders to minimize self-employment taxes. On the other hand, we want to increase W-2 salaries so they do not limit the amount of Section 199A that is deducted.
This seems straightforward however. Payroll taxes are 15.3% plus some unemployment and other insidious stuff. The Section 199A Qualified Business Income deduction is 20%. Therefore, there might be some small tax arbitrage by increasing salary, paying 16% (as an example) but getting 20% back. We will have to model this out once the dust settles, but be aware of this consideration. Read our full Section 199A Qualified Business Income article by clicking on the button below-
Our Business Expertise
As mentioned elsewhere we primarily focus on small business owners and their unique consultation and tax preparation needs. With 9 full-time consultation professionals including Certified Public Accountants and Certified Financial Planners on our team, the Watson CPA Group consults on corporate structures, S corp elections (even late S corp elections back to January), tax strategies, business coaching, industry analysis, executive benefits, retirement planning including individual 401k plans, exit strategies, business valuations, income tax modeling and tax representation.
We also work with business law attorneys in California, Texas and Colorado for business owners who have additional needs such as buying or selling a business including employee stock ownership plans and partner buy-ins. We also coordinate with Polycomp and RPS to create age-based profit sharing plans and cash balance (defined benefit) plans. We can run point on whatever your business needs so the communication is effective and efficient.
The button below links to our Periodic Business Review (PBR) Agenda. We use this throughout the year as a checklist for our business clients. We can also use it for any type of business consultation.
How does all this work? Let’s chat! Your unique situation will probably fit the S corporation world, but a dialogue is much better to determine the viability. Contact us to schedule a consultation. If all goes well, we will prepare a proposal which outlines the scope of services. View a sample proposal here.
Disclaimer: ClickBank is the retailer of products on this site. CLICKBANK® is a registered trademark of Click Sales Inc., a Delaware corporation located at 1444 S. Entertainment Ave., Suite 410 Boise, ID 83709, USA and used by permission. ClickBank’s role as retailer does not constitute an endorsement, approval or review of these products or any claim, statement or opinion used in promotion of these products.