From Bob Jennings at TaxSpeaker. Check out TaxSpeaker at taxspeaker.com The 2017 TCJA added even more pressure for a shareholder to minimize salary payments out of an S corporation because the 20% QBI deduction is calculated using profit after shareholder wages. The shareholder wants to minimize wage payments and maximize profit distributions because: 1. FICA tax savings 2. Worker’s compensation savings 3. Avoidance of the .9% Medicare surtax on wage income >$200,000 4. Incr

From Bob Jennings at TaxSpeaker. Check out TaxSpeaker at taxspeaker.com The 2025 maximum Roth contribution is $7,000, plus an over age 49 catch-up of $1,000. However, the taxpayer must have earned income of at least the amount contributed and the taxpayer’s total adjusted gross income must be less than roughly $150k single and $236k joint. A. Convert an existing pre-tax IRA (or other retirement account) to a Roth. There is no dollar limit on this idea, but the entire amount

From Bob Jennings at TaxSpeaker. Check out TaxSpeaker at taxspeaker.com Background Under the tax code prior to the Tax Reform Act of 1986, taxpayers could deduct most personal interest expenses, including interest paid on auto loans, as itemized deductions. This changed with the Tax Reform Act of 1986 which eliminated the deduction of personal interest under IRC Sec. 163(h), including auto loan interest, credit card interest, and other non-business borrowing. Since 1987, aut

From Bob Jennings at TaxSpeaker. Check out TaxSpeaker at taxspeaker.com As the author of our best-selling Social Security and Medicare manual,  I receive hundreds of questions every year, and these are the top ten questions and answers, in no particular order. 1. At what age should I draw my benefit?   No one can give you a “one-answer fits all” response. There are three factors involved in this answer: genetics, personal health and financial need. Keep in mind that the Soci

From Bob Jennings at TaxSpeaker. Check out TaxSpeaker at taxspeaker.com The title of this post will develop an earthquake of worry in the stable ground of retirement planning. The answer is unknown of course, but precedent does exist for making Roth accounts fully or partially taxable by looking at what Congress did with Social Security. A Synopsis of the Taxation of Social Security Benefits   When the Social Security system began over eighty years ago, the receipt of Socia

An Overview of the New Law On July 4th, 2025, the President signed into law the One Big Beautiful Bill Act, commonly referred to as BBB. This legislation introduces several changes, particularly concerning individual deductions for overtime. In this week’s newsletter, I will discuss some of the more troubling areas I am hearing about. The law is encapsulated in the new Code Section 225 , and it is essential to begin our discussion by quoting the opening section of the new law

If you are like me, you might get tired of hearing every “investment advisor” insist that you need to roll over your 401k to an IRA. They often present this as a major mistake if you don’t. While rolling a 401k to an IRA has its advantages, these commission-driven “advisors” rarely discuss the benefits of leaving your 401k untouched. I have both a 401k and an IRA, and I appreciate the advantages of each. I plan to maintain both accounts for life because the 401k offers signif

From Bob Jennings at TaxSpeaker. Check out TaxSpeaker at taxspeaker.com 1.  The 529 plan. Open a plan now for your kids, yourself, heck...

The New Charitable Deduction Floor In 2026, individuals making charitable contributions will face a new “floor” for charitable deductions of ½ of 1% (.005) of their Adjusted Gross Income (AGI). This means that for an individual with a family AGI of $200,000, a donation of $2,500 will result in a loss of the first $1,000 of the deduction. Specifically, the calculation is as follows: $200,000 x .005 = $1,000. Therefore, the individual will only qualify for a net deduction of $1

From Bob Jennings at TaxSpeaker. Check out TaxSpeaker at taxspeaker.com The Storage and Warehouse Leasing industry rents out and leases...