Generate a tax strategy memo for an S-corp client weighing additional QBI wages vs. retirement plan deferrals given 2025 sunset limitations

Client Financial Package *

Scenario Type * Select your client's scenario S-corp owner with W-2 wages below $340K threshold seeking QBI optimization High-income spouse business requiring retirement vs. wage balancing strategy Multi-owner S-corp with unequal ownership needing QBI wage allocation Service business subject to QBI phased-out limitations Real estate rental requiring qualified trade or business determination S-corp with 1099 contractor conversion to employee consideration Family business with children on payroll optimization strategy 谓之ed partnership to S-corp conversion timing analysis S-corp with Section 1202 stock planning implications International sales impact on QBI deduction qualification State-specific QBI limitations in different entity structures

Entity Details *

Current Compensation Structure *

Available Retirement Vehicles * Select primary retirement structures No plan - new implementation option only SEP-IRA established but funding flexible Solo 401(k) with profit-sharing capacity Safe harbor 401(k) with cross-tested allocation Defined benefit plan with permanent structure concerns Health savings account (HSA) with family maximum Cash balance plan paired with 401(k) combo SIMPLE IRA with limited contribution flexibility Roth 401(k) with designated Roth component 457(b) Deferred compensation plan available Multiple entity controlled group retirement testing

Intervening Events Select any known changes No anticipated changes - stable operation expected Business sale in progress affecting 2025 wages Second business acquisition planned with QBI implications Owner considering partial retirement with reduced hours Real estate purchases requiring special allocation New spouse salary/divorce decree affecting wages Children employees turning 21 affecting FICA wages Expected business loss from new venture Capital expenditure plan triggering Section 179 optimization State tax law changes affecting federal strategy Partnership to S-corp conversion under review

Optimization Objective * Select primary optimization focus Maximize current year QBI deduction dollar value Minimize total tax liability across 3-year window Maximize retirement contributions for wealth building Minimize FICA taxes while maintaining benefits Optimize for state tax implications Balance current tax savings with long-term wealth transfer Facilitate future sale with maximum basis Support multi-generational family employee strategy Account for upcoming retirement cash flow needs Maintain reasonable compensation audit defense Coordinate with other entity tax strategies

State Tax Considerations * Select primary state concerns California - conforms to federal Section 199A New York - state limitation on 199A deduction New Jersey - NJ specific QBI adjustment required Texas - no state income tax, franchise considerations Illinois - Illinois QBI subtraction modification Florida - no state tax, potential passthrough implications Multiple states - apportionment rules apply Minnesota - standalone state 199A rules Massachusetts - net income tax with 199A conformity Pennsylvania - separate state QBI calculation State with specific retirement plan contribution deductibility

Additional Constraints