#tax-planning
Strategic tax planning to minimize liability and maximize savings
Section 1361 sets five eligibility rules for S-corporations—domestic incorporation, 100-shareholder cap, eligible shareholders, one class of stock, and entity type. Routine business decisions like uneven distributions or a relocated shareholder can terminate the election; Section 1362(f) offers PLR-based relief that costs $30,000+ in user fees.
Since the Tax Court's 2023 Soroban decision, a state-law limited partner label no longer shields distributive share from 15.3% self-employment tax. This guide walks through the functional test under Section 1402(a)(13), the Renkemeyer line of cases, the 2024 proposed regulations, and the planning moves that still hold up for fund managers, LLC members, and operating partners in 2026.
OBBBA made the Section 199A pass-through deduction permanent and widened the 2026 phase-in to $201,750 single / $403,500 MFJ. Here is how the 20% QBI deduction, the W-2 wages and UBIA caps, the SSTB phase-out, the new $400 minimum, and Form 8995-A aggregation actually work for S-corps, LLCs, and partnerships.
OBBBA restored immediate Section 174 domestic R&E expensing in 2026 and gives small businesses until July 6, 2026 to amend 2022–2024 returns. A practical guide to the Section 41 four-part test, the 14% Alternative Simplified Credit, the Section 280C reduced-credit election, and the $500,000 payroll tax offset for qualified small businesses.
Compare the 2026 Solo 401(k) and SEP-IRA limits side by side — when each plan wins, how the SECURE 2.0 super catch-up adds $11,250 for ages 60–63, the mega-backdoor Roth strategy for after-tax conversions, the 20% versus 25% Schedule C calculation, and the Form 5500-EZ filing required once plan assets cross $250,000.
How retail garden centers and wholesale nurseries should value live-plant inventory, set mortality reserves by category, decide whether to elect out of Section 263A under the two-year preproductive rule, treat greenhouse heat and labor as direct COGS, and forecast cash through a spring-heavy revenue cycle.
A practical tax playbook for startup employees holding ISOs or NSOs — covering AMT exposure via Form 6251 line 2i, the 30-day Section 83(b) deadline, the two-year-and-one-year qualifying disposition rule, the $100,000 first-exercisable ISO cap, and the 1099-B cost basis error that causes double taxation.
Section 736 splits liquidating payments to a retiring partner into 736(b) property payments (capital gain, no firm deduction) and 736(a) income or guaranteed payments (ordinary income with self-employment tax, deductible by the firm). The service-partnership carve-out, Section 751 hot assets, and Section 754 election together determine whether six- or seven-figure tax dollars land on the retiree or the firm.
How small businesses should book prepaid insurance, rent, software, and retainers — the initial entry, monthly amortization schedule, IRS 12-month rule, and a written de minimis policy that keeps monthly profit comparable and unlocks year-end tax deductions.
A cash balance plan lets a 55-year-old business owner deduct roughly $230,000 a year in retirement contributions — far above the 401(k) ceiling — because a defined benefit pension caps the retirement benefit, not the annual deposit, so limits scale with age rather than income.
Starting in 2026, OBBBA imposes a 0.5% AGI floor on itemized charitable contributions and caps top-bracket deductions at 35 cents per dollar. Bunching gifts, funding a donor-advised fund, and making qualified charitable distributions from an IRA recover most of the lost benefit for typical itemizing donors.
Section 1033 lets non-farm businesses defer gain on property that is destroyed, stolen, or condemned if the proceeds are reinvested in qualifying replacement property within 2, 3, or 4 years. This guide covers the election mechanics on Form 4797, the similar-or-related-in-service-or-use vs. like-kind tests, the carryover-basis recapture trap, and the bookkeeping needed to survive an IRS look-back.
