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Prior to 2018 at the federal level, this strategy only saves on payroll taxes, which is effectively just the medicare portion: ~2.9% - 3.8% of tax savings. In
by meritt 9y ago
Prior to 2018 at the federal level, this strategy only saves on payroll taxes, which is effectively just the medicare portion: ~2.9% - 3.8% of tax savings.
In 2018 however pass-through income gets to take a very significant 20% deduction off the top. Whatever findings they uncovered in that study are going to accelerate very rapidly under the new tax plan.
- mark212 9y agoNot true. The new tax law excludes businesses that are labor-based (eg law firms, doctors, tax advisors). Precisely the folks described in the paper as the working 1%. It’s really only a benefit to people who earn income from passive real estate investments — like Trump and Sen. Corker in a coincidence that will shock precisely no one.