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Important: LISI’s Suite of 199A Tools Have Been Updated for the IRS’s

FINAL Regulations & Now Includes the "199A Sweet Spot” Calculator

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The Tax Cuts and Jobs Act dropped the top corporate rate to 21% and creates new Code Section 199A that provides for a 20% deduction for the non-wage portion of pass-through income. These changes set up nine important questions for advisors:

         

1) What will a client’s pass-through deduction look like?

2) Is a particular client “better off” being a C Corporation or a pass-through entity?

3) Is a client "better off" staying as an employee or switching to independent contractor status?

4) Should Schedule C business owners switch to being an S corporation and pay themselves a salary in order to claim a 199A deduction?

5) Trusts and estates can qualify for the IRC 199A deduction, but how should an advisor compute the amounts apportioned to the trust/estate and the beneficiaries.

6) How will a contribution to a Qualified Retirement Plan reduce taxable income and how will that impact the IRC 199A deduction?

7) How to calculate the 199A deduction when a client owns several pass-thrus?

8) How do I calculate the 199A deduction for specified agricultural and horticultural cooperatives (e.g., farmers)?

9) How do I optimize the 199A deduction?

  • Quickly calculate the pass-through deduction;
  • Help advisors model the complex choice of entity question;
  • Help advisors with the EE vs IC conundrum;
  • Model whether Schedule C business owners should switch to being an S corporation and pay themselves a salary in order to claim a 199A deduction;
  • Compute the deduction apportioned to trusts and estate beneficiaries from which  the apportioned amounts calculated can be input into the 199A deduction calculator to compute the deduction;
  • It helps advisors model how making qualified retirement plan contributions can reduce a client’s taxable income and how that impacts the IRC 199A deduction.
  • It lets users input the information for up to 5 pass-thrus to calculate the 199A deduction
  • • It lets users calculate the 199A Deduction for up to 10 owners of a pass-thru;
  • Allows advisors quickly calculate the 199A deduction for farmers, ie "specified agricultural and horticultural cooperatives"
  • Our new “Sweet Spot” calculator lets you find the amount of W-2 wages for shareholder employees needed to optimize the 199A deduction, 

The screenshots below provide an overview of what the inputs and outputs from both tools look like.  Twelve months of unlimited access is available for $159.00 

The tools are web based and require NO Download or Installation, and work in a standard web browser, on phones, tablets and computers.

CLICK HERE to listen to what Bob Keebler says about the tools

CLICK HERE to listen to Alan Gassman and Brandon Ketron describe the tools

Pass-Through Deduction Analyzer

To get started with the pass-through deduction analyzer, click on the Buy Now button below to pay/register.

C Corp vs. Pass-Through Analyzer

To get started with the C Corporation vs. pass-through entity analyzer, click the link below and make the entries in the boxes:

 

Sweet Spot Analyzer

LISI has added an important tool that’s sure to make your life a lot easier! Our new “Sweet Spot” calculator lets you find the amount of W-2 wages for shareholder employees needed to optimize the 199A deduction, which can be a huge timesaver for those advising clients or who will soon be filling out 2018 tax returns!

The tool can also compute the “sweet spot” for S Corporation Shareholder-Employee wages in order to optimize the 199A deduction when the shareholders have taxable income above the 199A thresholds so that 20% of qualified business income will equal 50% of W-2 wages.  Charts and graphs are included as well!


To get started with the Sweet Spot Analyzer, click the link below and make the entries in the boxes:

 

W-2 Employee vs. Independent Contractor Analysis

To get started with the W-2 Employee vs. Independent Contractor Analysis, click the link below and make the entries in the boxes:

 

Should a Schedule C Business Owner Switch to S Corporation Status and Pay Themselves a Salary To Claim a 199A Deduction?

To get started with this tool, click the link below and make the entries in the boxes:

 

199A Tool for Allocating the Deduction to Trust/Estate Beneficiaries?

To get started with this tool, click the link below and make the entries in the boxes:

 

Impact of Qualified Retirement Plan Deduction on IRC 199A Deduction

To get started with this tool, click the link below and make the entries in the boxes:


Calculating the 199A Deduction When a Client Owns Up to 5 Pass-Thrus

To get started with this tool, click the link below and make the entries in the boxes:




Calculate the 199A Deduction for up to 10 owners of a pass-thru

The tool lets you model the 199A deduction for up to 10 owners of a pass-thru entity. You can input the qualified business income, W-2 wages, and qualified property unadjusted basis and simply input each owner’s ownership percentage and the tool will allocate the items accordingly. Additionally, you can input each owner’s other items of income, such as net capital gain, qualified REIT dividends, and qualified publicly traded partnership income, to determine each owner’s respective 199A deduction.



Under IRC 199A(g), specified agricultural and horticultural cooperatives (e.g., farmers) may claim a deduction that is very similar to the “old” IRC 199 deduction, which was repealed under the TCJA. ‘Specified agricultural or horticultural cooperatives’ are organizations to which part I of subchapter T applies and which are engaged (i) in the manufacturing, production, growth, or extraction in whole or significant part of any agricultural or horticultural product, or (ii) in the marketing of agricultural or horticultural products. Generally, these cooperatives can claim a deduction equal to 9% of their qualified production activities income, subject to limitations. For oil related qualified production activities income, there is generally a 3% reduction of the deduction.


To get started with this tool, click the link below and make the entries in the boxes:

Questions? Click to read the FAQ

Twelve months of unlimited access

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© 2018 Leimberg Information Services, Inc. ALL RIGHTS RESERVED No user may modify this software in any way, including but not limited to, decompiling, copying, sharing, disassembling, or otherwise reverse engineering the software.

These calculators do not represent tax, accounting, or legal advice. Individual taxpayers should rely on their own advisors. The authors and publisher expressly waive and disclaim any and all warranties concerning the calculators and their use or operation, whether express or implied, including without limitation, any warranty of merchantability or fitness for a particular purpose. The authors make no warranties as to the results to be obtained from the use of the calculators. You expressly agree that the use of the calculators is at your sole risk. The authors will not in any way be liable to you or any other person or entity for any damages, claims, liabilities or losses, regardless of cause, arising from the use of the calculators. The calculators are provided to you on an “as is” basis and without warranty of any kind.