The $77,200 Question

Technical topics regarding tax preparation.
#1
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Skip the 199A Pass-Through Deduction and opt to incorporate your business. If your ordinary income is under $77,200 then any dividends would be in the zero tax bracket. The corporation has the added advantage of being able to deduct state taxes.

Would be interesting to model this out. You would need reasonable compensation. You could try and time the dividend in a tax year where the W-2 wages allowed for a zero tax rate. Maybe have a corp with a fiscal year-end.

A lot of other things to consider but an effective rate of 20% would be impressive. After the sunset, you would need to plan for the corporate rate going back up, assuming this doesn't get extended.
 

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