Tax Savings for Small Businesses: A Guide to the Qualified Business Income (QBI) Deduction
March 01, 2025
The Qualified Business Income (QBI) Deduction remains one of the most valuable tax breaks for small business owners and self-employed individuals. Enacted under the 2017 Tax Cuts and Jobs Act (TCJA), this deduction allows eligible taxpayers to reduce their taxable income by up to 20% of qualified business income. However, eligibility and deduction amounts vary significantly depending on business type and the taxpayer’s income level. We break down the rules for each category to help you navigate this complex but rewarding tax benefit in this post.
Unlocking the Backdoor Roth IRA: A Strategic Guide for High Earners
February 27, 2025
For high-income earners, the Roth IRA’s promise of tax-free growth and withdrawals is tantalizing—but strict income limits often stand in the way. Fortunately, the Backdoor Roth IRA offers a workaround: you contribute to a traditional IRA first and then convert it to a Roth. This guide explains how this strategy works, who qualifies, and how to navigate the tax nuances.
Tax Implications of Restricted Stock Units (RSUs)
February 22, 2025
Restricted Stock Units (RSUs) are a widely used form of equity compensation provided by employers. Unlike stock options, RSUs do not require an upfront purchase. Instead, they convert into company shares upon vesting, meaning you acquire them gradually or after meeting specific conditions. While RSUs offer significant financial benefits, their tax implications can be complex, particularly in high-tax states such as California.
How California’s PTE Tax Lowers Taxes for Small Businesses
February 21, 2025
For business owners in California, the federal $10,000 cap on state and local tax (SALT) deductions has often felt like a major financial constraint. However, in 2021, California introduced a solution: the Pass-Through Entity (PTE) Tax. This strategy offers a way for partnerships, S corporations, and LLCs to bypass the SALT cap and secure federal tax savings.
Mastering Depreciation - Part II: Advanced Depreciation Strategies for Rental Properties
February 18, 2025
In the first part of this series, we explored the fundamentals of depreciation, the IRS’s method of allowing property owners to recover the cost of their investments over time. Now, we turn to advanced strategies that can amplify tax savings, accelerate cash flow, and transform depreciation from a passive deduction into an active wealth-building tool. These tactics—cost segregation studies, bonus depreciation, Section 179 expensing, and the de minimis safe harbor—are not just for institutional investors. With the right approach, even small-scale landlords can harness their power.
Mastering Depreciation - Part I: The Backbone of Rental Property Tax Strategy
February 16, 2025
For rental property investors, depreciation is far more than a line item on a tax return—it's a foundational strategy for building long-term wealth. By spreading the cost of a property over its useful life, depreciation allows investors to reduce taxable income while holding an asset that often appreciates in value. Yet, navigating the rules requires a clear understanding of how depreciation works, from its basic mechanics to its long-term implications. Let’s explore this essential tool in detail.
