Dodging Disqualification

 

In mid-2010, the U.S. Congress came close to closing the S corporation tax loophole for some small professional service "S" corporations.

Fortunately, while the legislation (named the "American Jobs and Closing Loopholes Act) didn't end up passing the U.S. Senate, lawmakers tipped their hand about how they might choose in the future to tax some S corporations. Specifically, in the proposed law, Congress created general principles and a handful of detailed rules that disqualified certain types of small professional service businesses from benefiting from an "S" corporation.

When the law was being discussed, I wrote the "Dodging Disqualification" ebook to help businesses and their advisors think about the new law. The ebook is mostly a historial artifact given that the Senate filibustered and refused to vote on the law, but if you're interested in what almost happened, you can still purchase and read my 20pp $14.95 eBook, Dodging Disqualification, by clicking the button below:

Dodging Disqualification gives you the information you would have needed to sidestep or at least minimize the impact of this painful new piece of tax legislation. The 20pp downloadable ebook describes which types of S corporations would have become "disqualified S corporations," for example. And the eBook explains how S corporation shareholders would have estimated the extra taxes paid as a result of disqualification. (Typically, the extra cost was $5,000 to $10,000 per year per shareholder--so the numbers quickly become large.)

If the "American Jobs and Closing Loopholes Act of 2010" would have become law, you would have wanted to possess a working knowledge of the issues covered in this handy publication if you owned an S corporation or advised S corporations.

Table of Contents

Dodging Disqualification:
How to Legally Avoid Disqualification of Your S Corporation and
Minimize Self-employment Taxes If You Can't

Introduction

How S Corporations Save Payroll Taxes

How the New Rule Works

• Which Services Count as Professions?
• Defining the Qualifier "Substantially All"
• When is an S Corporation is Disqualified?

Assessing the Damage of Disqualification

Dodging Disqualification

• Avoiding Disqualification by Failing the "principal asset" test
• Avoiding Disqualification by Failing the "substantially all" test

Minimizing Self-employment Income from an S Corporation

• Maximize Disqualified S Corporation Deductions
• SEP-IRA Plans Deserve Another Look
• Defined Benefit Pension Plans Deserve Another Look, Too
• Minimize Non-business income within S corporation
• Self-employed Health Insurance and Health Savings Accounts
• Accelerate Income into 2010
• Delay Deductions until 2011

Closing Comments and Caveats

Appendix A - Relevant Portions of H.R. 4213

Money Back Guarantee

If for any reason you feel you didn't get valuable, worthwhile information from Dodging Disqualification, contact me at steve.nelson@stephenlnelson.com and request a refund within 60 days. Your payment will be completely refunded. No questions, no hassles, no delay. (By the way, if you request a refund, we typically take a workday or two to process your request.)

About the Author

The Dodging Disqualification ebook was written by Stephen L. Nelson, CPA. A CPA for twenty-five-plus years, Nelson holds an MBA in Finance from the University of Washington and an MS in Taxation from Golden Gate University. The author of numerous best-selling books about accounting and finance including Quicken for Dummies (which sold more than 1,000,000 copies) and QuickBooks for Dummies (which sold more than 500,000 copies), Nelson taught LLC and S corporation tax law in the graduate tax school at Golden Gate University, the nation's largest graduate tax school.