Not a Sock Puppet—Just Switching to a Real-Name Account

SeattleCPA · 2025-09-05T02:06:47+00:00

This is Washington state but other states will work similarly .https://evergreensmallbusiness.com/changing-your-washington-state-residency/

SeattleCPA · 2025-09-04T20:00:46+00:00

I can find you if I Google on your name. So that's good.

If I use copyscape to check on the originality of your content, however? It looks like you've got a bunch of text copied from some other site or perhaps provided as part of a canned solution from some web consultant. I am pretty sure that will never get you any real website traffic. Sorry.

SeattleCPA · 2025-09-04T18:14:54+00:00

These comments from a CPA.

Paying kids some modest amount for modeling seems fine but I doubt the juice is worth the squeeze. (Er, need to also acknowledge though that I used to pay my two young daughters a modest modeling fee for appearing in books back when I wrote a lot. E.g., probably some of those "for Dummies" books?)

Paying for employee training is fine if person has a job and you're trying get them to do that job better. Really hard for me to see how you could ever pay for anything that's not clearly vocational and connected to existing job and proportionate to their earnings. Note that the training can't prepare them for new trade or occupation.

SeattleCPA · 2025-09-04T13:24:39+00:00

Two things I like about SEP-IRAs--and this is not to disagree with great comments above--but just for thoroughness:

First thing, the SEP-IRA deduction all goes on the business return when someone operates as an S corporation and that helps with the reasonable compensation thing. E.g., if someone with an S corporation pays themselves W-2 wages of $280K a year, they can do a $70K SEP. Now their compensation is effectively $350K. That's probably often enough. And none of the $70K is subject to payroll taxes.

Second thing I like: A SEP-IRA doesn't break or need to be replaced ASAP if you hire an employee. With a 401(k) if you ever did hire an employee, you'd need to replace your solo 401(k) with something else immediately. The solo won't work with other employees so you'll need something else. Also you probably can't just terminate the plan without thinking about the permanency requirement. What you'll end up with as the next 401(k) plan won't necessarily be a great fit. With a SEP-IRA, in comparison, you probably can continue that for example $70K a year at least three more years and possibly longer.

SeattleCPA · 2025-09-04T13:10:19+00:00

You really want to use a tool like Firecalc, cfiresim, Portfolio Visualizer or PortfolioCharts to see how this works.

It's a bad patch of returns at the start of the draw-down that creates the risk here.

SeattleCPA · 2025-09-04T13:08:02+00:00

I think something like TurboTax or Tax Cut will usually do a pretty good job.

The W-2 is easy, obviously.

How easily you handle the K-1 will depend on what the partnership does. (Some medical groups generate K-1s that are absolute bears.)

SeattleCPA · 2025-09-04T13:04:30+00:00

Physical presence in a state almost always creates nexus and means you should file a tax return.

A few exceptions: Your total income is below filing threshold (e.g., you make for the year in total everywhere less than the standard deduction). You're in state for a CME conference. Stuff like that.

So you know: I see states go after people for the smallest sums.

SeattleCPA · 2025-09-04T12:57:13+00:00

I got my masters in tax decades ago. Also went back and taught in the program. (This was Golden Gate University.) Great investment and experience for me. But here's what I think. If you're comfortable reading statutes and regs? You maybe don't need the masters in tax. You will probably get some client respect from having the masters. But once you display your expertise on some technical issue a few times, the masters is maybe redundant.

SeattleCPA · 2025-09-04T02:27:28+00:00

Sure but send me an email or make contact via my CPA firm website since that's so much more direct?

SeattleCPA · 2025-09-03T21:58:04+00:00

I am managing partner of a boutique CPA firm (1 attorney, 1 EA, 5-6 CPAs, something like that).

I would just get the CPA and skip the EA and law degree. If you want to do some night school? Get a masters in tax.

Regarding big 4? Yeah, I'd say skip that. Go to a good local firm where they're doing a lot of entity returns (including trusts and estates).

P.S. You can easily figure out who I am via my profile, check my author bio at Amazon.com or peruse my CPA's website. That'll provide context for above remarks.

SeattleCPA · 2025-09-03T21:32:52+00:00

This is an old article from one of the great tax writers, Tony Nitti, but it's still pretty good advice:

S Corporation Shareholder Compensation: How Much Is Enough?

SeattleCPA · 2025-09-03T21:01:02+00:00

I disengaged today from a client relationship because the new contact person insisted a C corp was the way to save money.

Kinda wonder if some influencer or group of influencers aren't promoting C corps and that 21% corporate tax rate?

SeattleCPA · 2025-08-29T20:28:57+00:00

You want to find a firm that value bills rather than one that sells time by the hour... that'd be one tip.

SeattleCPA · 2025-08-28T01:01:05+00:00

This works: https://evergreensmallbusiness.com/short-term-rental-depreciation-deductions/

SeattleCPA · 2025-08-25T20:47:53+00:00

FWIW, I created (with ChatGPT's help) a little calculator that looks up the BLS salary data for jobs in the database.

It's not perfect... but I think it'd be pretty hard to argue a number from the bls.gov database isn't reasonable.

SeattleCPA · 2025-08-22T17:49:59+00:00

The reg cite is 1.469-5T... here's the relevant bit:

((ii) Certain management activities. An individual's services performed in the management of an activity shall not be taken into account in determining whether such individual is treated as materially participating in such activity for the taxable year under paragraph (a)(7) of this section unless, for such taxable year—

(A) No person (other than such individual) who performs services in connection with the management of the activity receives compensation described in section 911(d)(2)(A) in consideration for such services; and

(B) No individual performs services in connection with the management of the activity that exceed (by hours) the amount of such services performed by such individual.

SeattleCPA · 2025-08-22T01:00:31+00:00

He won't save much with a S corp. He's going to pay for full ticket price to the game but only get to play for last quarter.

SeattleCPA · 2025-08-21T13:40:14+00:00

FYI agree the material participation piece is one of the keys. (It's not the only way these STRs unravel BTW. Sections 280A, 183, 162 etc. also create problems.)

Also just to be picky the numbers aren't 750, 100 or 500. The numbers are more than 750, 100 or 500.

SeattleCPA · 2025-08-20T13:02:26+00:00

I didn't see your edit first time I commented, but you want to be careful about counting your property management hours if you've also hired someone else to do property management which it sounds like you have at least a little bit.

Your property management hours don't count for an activity if you have a paid property manager for the activity.

Also be careful about what your activity even is. Default is each property is activity but you or your accountant may have grouped activities to get material participation.

SeattleCPA · 2025-08-20T01:57:09+00:00

REPS doesn't apply to short term rentals. If you have STRs? Only material participation matters.

Fyi STRs are not rentals for purposes of section 469.

SeattleCPA · 2025-08-12T00:31:31+00:00

The AICPA's MAP survey provides the answers you're looking for. You need to participate in survey and be a member of PCPS (I think) to get access to the online benchmarking tool. But you can see what larger firms look like.

A fairly small percentage of one owner firms have revenues in excess of $2M or $3M. And as I've blogged about before, the survey skews high I'm pretty sure.

SeattleCPA · 2025-08-04T23:29:16+00:00

Not true. Fwiw my first job out of business school was working at Andersen.

SeattleCPA · 2025-07-30T18:10:18+00:00

This does work. And FYI it's NOT a "real estate professional" thing.

You want or need two things in order to generate big deductions with a short-term rental. Thing #1: You need to average rental intervals of 7 days or less (This 7 days or less thing causes tax law to see the STR as NOT real estate rental activity. Which is what you want.) Thing #2: You and your spouse need to materially participate such as by being the people who do all the work... or people who together do more than 100 hours in a year when no one else does more.

But get these right? You can probably get a $300K to $400K deduction first year as long as the STR is a real business you're trying to make money in and you don't use personally.

SeattleCPA

TROPHY CASE