Using Pass Through-Entities to Take Advantage of 2018 Tax Law Changes

Real Money Talks

We are all about making money, growing money, and keeping your money. One of the best ways you can keep your money is to be smart about your tax structure. The new tax laws have passed, and 2018 has a lot of changes for small business owners and investors. My partner and guest Mike Giorgi is here to talk about all of the new changes and how to get the most out of them.

We talk about the importance of a team to really help you set things up correctly. Depending on your circumstances, you may need to create a pass-through entity to take advantage of the 20% QBI deduction. Mike talks about setting up your corporate structure correctly, planning, and monthly check-ins. We also have a checklist for you and a lot of great advice for keeping the money that you have earned.

You can find Mike here: Ask [e-mail] Show Notes

• [02:28] 2018 tax code. The changes are amazing for the rich.
• [02:48] There are a lot of changes that need to be made if you are investing or a service company or doing business in general.
• [02:59] People who are not service individuals like attorneys or realtors can get the 20% qualified income deduction.
• [04:30] We have found a work around to get this deduction by having a management company.
• [05:09] You need to have these types of conversations with your corporate compliance people.
• [06:13] Doctors and professionals can lower their taxes by having money flow through their practice or management company.
• [08:59] A 21% flat tax is an amazing thing especially for professionals.
• [09:13] Have a management company that performs non-professionally licensed tasks with an S election, so you can get pass through income and your QBI deduction.
• [09:42] Associative entertainment deductions are gone. Travel meals are limited to 50%.
• [10:43] If you think about it, the trade offs are worth it.
• [11:15] Get your tax team involved and ask about the effective tax rates of your current entities and what changes you may need to make with the new laws.
• [11:49] Create a plan and create a budget. You need to document everything.
• [12:31] Have a resolution and plan backing up that resolution. Check and recheck your plan on a monthly basis and make sure you are doing everything in that documentation.
• [12:59] Find a professional team, put a plan in place, and document everything.
• [14:08] Be sure to issue your corporate stock if you have an LLC. Make sure there is another officer in the annual minutes.
• [15:20] Document a special resolution for anything that is special. Track large changes.
• [15:48] Have cash flow in your proceedings.
• [16:32] Email [e-mail]
• [17:21] Anyone making $175,000 to $200,000 needs to talk to Mike. There is a phase out that starts at these numbers. They need to be spread out across the structure.

Links and Resources:

• Loral’s Real Money Talks
• Ask Loral
• [e-mail]