This is similar to how I do things, minus the CPA and swap Square with Gusto.
> you need to be your own tax "champion"
Exactly! This is why I stopped using a CPA. I tried a few different people over the years, and I felt like I was doing all the heavy lifting. One year, I had a guy not deduct my payroll taxes (which I caught), once I was told I could fund two 401ks with the maximum amount when I was working for my company and another (nope), and once they told me I couldn't deduct my personal health insurance premiums because I paid for it out of my own pocket (the IRS lets you treat it as a business expense in certain cases).
The unforgivable one is that no one ever told me to pay myself ~28% of my distributions as salary (if reasonable) to optimize the QBI deduction (this saves thousands of dollars per year for SaaS businesses). I just happened to notice that when reviewing the QBI worksheet, and then Googled it to confirm. The CPA didn't have a clue.
Thanks for reminding me about QBI! I knew there was one other deduction but forgot to mention it in the thread. Last time I checked, the QBI deduction was 20% of the W2 income. Another great example of being smart about your own taxes.
> you need to be your own tax "champion"
Exactly! This is why I stopped using a CPA. I tried a few different people over the years, and I felt like I was doing all the heavy lifting. One year, I had a guy not deduct my payroll taxes (which I caught), once I was told I could fund two 401ks with the maximum amount when I was working for my company and another (nope), and once they told me I couldn't deduct my personal health insurance premiums because I paid for it out of my own pocket (the IRS lets you treat it as a business expense in certain cases).
The unforgivable one is that no one ever told me to pay myself ~28% of my distributions as salary (if reasonable) to optimize the QBI deduction (this saves thousands of dollars per year for SaaS businesses). I just happened to notice that when reviewing the QBI worksheet, and then Googled it to confirm. The CPA didn't have a clue.