2024 LLCs: Reducing Self-employment Tax and Maximizing the 20% Passthrough Deduction

Author: Greg White

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: November 2024

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

Topics Covered

• Self-employment tax on rental properties that are businesses
• Self-employment tax for partners
• There's a huge battle between the IRS and hedge funds
• What about LLC members
• Current guidance
• Proposed regulations
• Case law
• Paying more SE tax is sometimes a good thing
• Section 199A 20% QBID 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 the year the original limited partner exception was enacted

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