2022 LLCs: Reducing Self-employment Tax and Maximizing the 20% Passthrough Deduction
Author: Greg White
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
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 LLCs provide a better tax result for owners. You will learn how LLCs can be used to increase the qualifying business income deduction (20% passthrough deduction). And we’ll cover how LLCs 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: September 2022
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
- Recognize and apply self-employment principles to LLC members
- Describe how to maximize LLC's 20% passthrough deduction
- Describe how to adjust guaranteed payments to maximize the 20% passthrough deduction
- Identify what year the original limited partner exception was enacted
- Describe how many hurdles must be cleared in order to qualify as a true limited partner
- Identify an area where the IRS "seems to agree" but does not agree definitively under the IRS LB&I issued "Self-Employment Tax and Partners"
- Identify the sweet spot with respect to average indexed annual earnings for purposes of Social Security benefits
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
