Crack and Pack
In this episode, John fills us in on the most recent updates from the IRS on the technique referred to as “crack and pack.” The IRS has vowed to come after it!
John is the author of 5 Ways Your Wealth is Under Attack. He has lectured extensively on financial planning and has received the Five StarSM Wealth Manager Award for 2011, 2012, 2013, 2014, 2015 and 2016.
John’s strength lies in his ability and commitment to continually improve the level and quality of the financial planning process. His dedication to his clients’ growth involves an evolving strategy that strives to meet the demands, desires, and needs of his clients in a continually changing economic environment.
Don’t miss John’s explanation of “crack & pack” and the TCJA deductions:
- The 20% tax break for pass-through businesses in the new Tax Cuts and Jobs Act has a ceiling for qualified business income (QBI).
- Many small business owners have been looking for ways to get around this QBI limit, and one way might be to break up their business into smaller entities:
- Small businesses in service industries like healthcare, financial planning, insurance, etc., try to separate the admin part of their business from the service part.
- For those small business owners who are married filing jointly, if their income goes above $315k, they lose the 20% deduction for their pass-through service business.
- The impact of the tax break is pretty big: If a business owner is making a salary of $200,000 and they’ve got $600,000 of qualified business income, 20% of that QBI number could be deductible. With $120,000 deductible, they pay tax on $480k rather than $600k (plus the salary).
This explains why people have been contemplating pulling their businesses apart! So what to do?
First, download our 2018 Business Owner’s Guide. Next, listen to the complete podcast above, then make an appointment with us here or by calling 732-542-1565.
Are you ready to increase your profit growth by 25%? John will show you how in the 2018 Business Owner’s Guide To Maximizing Your Benefits From The 2018 Tax Cuts.
Click here to get your complimentary copy.
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